👨🏿‍🚀TechCabal Daily – Will you buy the cNGN?

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Cryptocurrency

cNGN, Nigeria’s first Naira-backed stablecoin goes live

Crypto
Image Source: Wunmi Eunice/TechCabal.

Will you buy the cNGN?

The cNGN, Nigeria’s first Naira-backed stablecoin, has many use cases. The most obvious and important one is that it provides a low-cost way for remittances and cross-border transfers. Recently, there’s been a lot of hype around stablecoins, and Nigeria is one of the countries leading the charge

The launch of cNGN appears well-timed. Interest in cryptocurrency and stablecoins is growing in Nigeria, though current trading volume is primarily driven by a small group of knowledgeable traders and businesses seeking protection against foreign exchange shortages.

This raises questions about adoption by average Nigerians lacking the same level of knowledge or trust in digital currencies. Factors like high inflation, currency instability, and general trust issues could hinder wider acceptance.

Yet, the cNGN is an exciting prospect. Developed by the African Stablecoin Consortium (ASC)—a group of fintechs, banks, and blockchain companies—cNGN is pegged 1:1 to the Naira. Unlike the government-backed eNaira, this private-sector stablecoin aims to make the Naira more competitive in the digital asset economy, especially against popular USD-pegged stablecoins like USDT and USDC.

For Nigerians, cNGN could be a game-changer. It offers cheaper transfer fees compared to USDT on Ethereum, which is a big deal for a country where remittances are a major part of the economy. 

Once the Naira-backed stablecoin is fully integrated on all blockchain networks, and completes rollout, it is expected to start trading on-chain. On-chain trading will open up the cNGN to list on more platforms and exchanges, giving it more use cases for Nigerians to benefit from the compliant stablecoin.

For example, once Nigeria’s Securities and Exchange Commission (SEC) issues more provisional licences as part of its Accelerated Regulatory Incubation Programme (ARIP), it will empower more local and foreign exchanges to list the stablecoin. For now, it’s only available on Busha, though exchanges like Quidax might list it soon.

The cNGN launch is a big step for Nigeria’s crypto space, and if it sees more utility, it could change how Nigerians move money digitally—the compliant way.

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Banking

Fidelity Bank raises $154.8 million

Image source: Google

Fidelity Bank, a tier-2 Nigerian commercial bank with ₦6.23 trillion ($4.2 billion) in total assets, has recorded a 237.92% subscription for its recently concluded public offer, making it the fourth bank to complete a public capital raise after tier-1 banks, Access Bank, GTBank, and Zenith Bank.

Following the Central Bank of Nigeria’s (CBN) announcement in March 2024 for a new recapitalisation rule for international, national, and regional banks, Fidelity Bank was the first bank to begin raising funds; it listed its share and rights offer on the Nigerian Exchange (NGX) in July 2024.

The bank initially offered 10 billion ordinary shares at ₦9.75 ($0.0065) per share but received applications for 23.79 billion shares, amounting to ₦231.97 billion ($154.8 million). Following CBN’s verification, 107,588 applications were deemed valid, and Fidelity absorbed an additional 5 billion shares beyond its initial offer.

Additionally, its rights issue of 3.2 billion shares at ₦9.25 per share recorded a 137.73% subscription, with all valid applications fully allotted. Shares will be credited to investors’ central securities clearing system (CSCS) accounts by February 13, 2025, while refunds for surplus applications will follow. This will allow the investors to start receiving dividends on their investments. Those who subscribed successfully can track their allotments and prepare for potential gains, while others may consider the secondary market for opportunities. 

As a national bank, Fidelity has reached the required ₦200 billion ($133.4 billion) capital base that was set by the CBN in 2024. The capital raise also shows strong investor confidence in the bank and its future. Additionally, the oversubscription reflects growing investor interest in the banking sector, which could shape further capital raises by other tier-2 and smaller banks. More broadly, the successful public offerings of Nigerian banks in the capital market send a strong message that the market remains a viable and effective avenue for raising capital.

With the CBN’s recapitalisation deadline approaching, Fidelity’s success sets a precedent for how smaller banks can still find success on the capital market. Presently, Stanbic IBTC, another tier-2 lender, is raising money through a rights issue.

Investors and industry watchers alike will be looking at how other banks respond in the coming months.

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Economy

CBN Postpones MPC Meeting

cbn
Image Source: CBN

The Central Bank of Nigeria (CBN) has once again postponed its Monetary Policy Committee (MPC) meeting. Originally scheduled for February 17–18, the meeting has been delayed due to the unavailability of updated inflation data.

Earlier this year, Nigeria revised its methodology for calculating the consumer price index (CPI) and gross domestic product (GDP). The National Bureau of Statistics (NBS)—which tracks inflation by monitoring the price changes of 740 goods and services in the CPI basket—expanded the basket to include additional items, with 2024 designated as the new benchmark year. According to the NBS, the updates were implemented to better reflect current consumption patterns.

This marks the second postponement of the MPC’s first meeting in 2025. Initially set for January 27–28, the meeting was rescheduled to February 17–18 following the CPI rebasing.

Analysts suggest that the CBN is holding off on rate decisions until it gains a clearer picture of inflation trends—a process that could take two to three months under the new CPI methodology. They expect further interest rate hikes in the near future.

Over the past year, the MPC increased the benchmark rate by a total of 8.75 percentage points in its bid to combat inflation. At its final meeting of 2024, it raised the interest rate by 25 basis points, bringing it to 27.50%.

This isn’t the first time the CBN has postponed an MPC meeting under Governor Olayemi Cardoso. After his appointment in September 2023, the bank delayed a meeting as investors awaited his strategy to rein in inflation.

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CRYPTO TRACKER

The World Wide Web3

Source:

CoinMarketCap logo

Coin Name

Current Value

Day

Month

Bitcoin $96,897

– 0.10%

+ 2.91%

Ether $2,630

– 1.21%

– 18.82%

XRP

$2.39

– 3.61%

+ 2.30%

Solana $201.51

– 1.88%

+ 8.16%

* Data as of 05:25 AM WAT, February 10, 2025.

Events

  • The Africa Tech Summit in Nairobi, Kenya taking place 12th & 13th Feb 2025 will once again provide unrivaled insight, networking and business opportunities for African and international investors and tech leaders who want to drive growth across the Continent. The event connects 2000+ industry leaders, 1000+ companies, and 160+ speakers via four tracks plus workshops, expo and multiple fantastic networking opportunities. Tickets are on sale now
  • Join Africa’s creative innovators, entrepreneurs & leaders at The Omniverse Africa Summit, at Landmark Event Centre, between 25 – 28 Feb 2025. Explore transformative tech, business & sustainable growth. Register now.
  • GITEX AFRICA 3rd edition is NOW OPEN for registration. Africa’s largest tech and start-up event will be held from 14-16 April 2025 in Marrakech, Morocco. Attend to see the leading brands in tech, and the most innovative startups, and network with tech leaders, investors, speakers and government delegations from across Africa and across the globe. Register here.

Written by: Faith Omoniyi & Emmanuel Nwosu

Edited by: Timi Odueso & Olumuyiwa Olowogboyega

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