KuBitX, a digital currency trading platform has developed the first stablecoin NGNX in Nigeria to facilitate remittances across Africa.
Stablecoins continue to show tremendous potential in the cryptocurrency space, especially in day-to-day commerce and international remittance.
NGNX Stablecoin First in Nigeria
A stablecoin is a form of digital currency that combines the best of both cryptocurrencies and fiat currencies – operating in a trust-minimized fashion. It is used for cheap and rapid transfers of value whilst maintaining a peg with fiat like naira. This makes stablecoins well-suited to use cases where volatility concerns rule out offerings like Bitcoin or Ethereum.
According to KuBitX CEO Eric Annan, the stablecoin NGNX is pegged to the Nigerian naira, enabling the company to provide traders with lower volatility. This fits the company’s plan to build a digital marketplace for African projects and investors. With the NGNX stablecoin, Nigerians will be able to pay to over 3000 merchants and send money within and outside the county.
Annan believes that the launch of NGNX will help address some of the misconceptions about blockchain in Africa. He commented:
“To many blockchain is bitcoin and bitcoin is Ponzi in the minds of many policymakers, financial industry players, (and) ordinary people. One can’t just ignore such misconceptions -especially when the majority of Nigerians first heard of bitcoin through a popular Ponzi scheme called MMM.”
MMM is an infamous Ponzi scheme perpetrated by Sergei Mavrodi, a convicted Russian fraudster who launched the scheme promising participants a 30 percent return on their investment. Bitcoin became the payment option of choice for the scheme. MMM Nigeria eventually collapsed in December 2016.
Annan reiterated that partnering with trusted integrated payment company is key to taking blockchain mainstream in Nigeria. For this reason, KuBitX has teamed up with Interswitch, a payment processing company based in Nigeria. The partnership will see KuBitX leverage Interswitch’s payment gateway to make financial services widely accessible to people in Africa.
Blockchain adoption in Africa
Blockchain holds promise to address some of the critical challenges facing transaction and the way of doing business in Africa. In particular, distributed ledger technology can help simplify and streamline payments in a trustless ecosystem.
“Blockchain […] will be the most used solutions in Africa in the next five years,” Annan said.
He further added that the number of blockchain startups is incredibly high compared to the internet era. However, he cautioned that Africa will not be able to achieve mainstream blockchain adoption unless it is willing to embrace formal financial institutions as part of the process.