Busha announces new naira stablecoin, NGNb

The CEO of the Nigerian cryptocurrency exchange Busha, Michael Adeyeri, has announced that the firm is launching its own naira-pegged stablecoin, NGNb. 

What we know: The NGNb is pegged one-to-one with the Nigerian naira, with corresponding reserves held by Busha. 

• In time, the exchange plans to make the stablecoin available to other exchanges and fintechs. 
• According to the NGNb's website, the only available means to gain access to the stablecoin is by getting in touch personally with the team at Busha. 

What we don't know: At the moment, it is unclear how many tokens are already minted and in circulation. 

• While the announcements hinted at a desire to list on multiple exchanges, it is unclear if the NGNb is available for purchase on other public exchanges just yet. 
• In addition, details on the NGNb's reserve structure, proof of funds, redemption terms and tokens minted and in circulation are not publicly known yet. 

Dive deeper: In terms of the rationale behind the move, the token's creators say there is a demand by businesses for more options for settlement in naira. 

• Adeyeri said the company identified a gap in "widely accessible local currency settlement instruments on blockchain networks" and is moving to plug the gap with the NGNb. 
• Cofounder Laolu Samuel-Biyi added that a naira-pegged stablecoin like NGNb could allow non-Nigerians to participate in the Nigerian financial market, and vice versa. 

But: Nigeria has an existing local stablecoin, the cNGN, which has gained traction and attracted significant market share in the 21 months since its official debut on exchanges. 

• As of Nov. 2, there are 4.4 billion cNGN tokens in circulation among 15,440 holders. CNGN is also listed on Busha. 
• For Busha, creating its own naira stablecoin means greater control over minting, redemption, liquidity management and more money through fees, spreads and other revenue opportunities that come with issuing a stablecoin. 
• While it is not unheard of for two stablecoins to exist around the same currency—multiple USD stablecoins, for example—two naira-pegged stablecoins could see liquidity fragmented across tokens representing the same currency. 
• This is crucial for a token like the naira that does not possess similar value and demand to the United States dollar, a global currency. 
• Busha's strategy for the NGNb is more business-focused, according to Adeyeri and Samuel-Biyi, suggesting that the stablecoin may be tailored more for institutional-grade use rather than retail adoption.