Xend Finance is enabling cNGN-powered investments in the Nigerian money market

Xend Finance, a decentralized finance platform and cryptocurrency exchange, has introduced a new feature that enables users to invest in Nigerian short-term debt instruments and securities using the cNGN, a stablecoin pegged to the naira.

According to Ugochukwu Aronu, cofounder and CEO of Xend Finance, this feature is designed to simplify the investment process and could serve as a channel for increasing foreign direct investment into Nigeria.

The details 

• During a webinar showcasing real-world use cases for the cNGN stablecoin, Xend Finance CEO Ugochukwu Aronu shared that the company is collaborating with money market fund AXA Finance to power this new investment feature.
• International investors can swap USDT for cNGN through Asset Chain, a decentralized exchange also founded by Aronu.
• Once converted to cNGN, investors can channel funds directly into Nigerian money market instruments via the Xend Finance platform, bypassing the lengthy and complex process of acquiring naira from abroad.
• Aronu noted that this solution not only streamlines access to local investment opportunities but also offers the Nigerian government a potential pathway to attract foreign direct investment, given the country’s comparatively high money market yields.

Key quote 

• Aronu said: 

“Maybe a person has a thousand dollars. They can easily go to a DEX and swap 100 dollars — 10% of that — and convert it to cNGN and invest in the Nigerian money market easily. We have already enabled that through the Xend Finance application, and we are working with AXA [money market fund] to make it happen.” 

• On the profit margins from such investments, Aronu told Mariblock: 

“On the Xend Finance app, for example, you can earn maybe 21/22 [percent] annually from the Nigerian money market through cNGN ...  It’s live and we’re attracting a lot of liquidity. People with even USDT now can easily invest in the Nigerian money market.” 

Dive deeper 

• During the webinar, Aronu spoke on other potential use cases for the cNGN, which Asset Chain and Xend Finance are exploring. 
• According to him, the cNGN can solve the ‘fragmentation of liquidity’ in Nigeria’s peer-to-peer (P2P) market, which is dominated by USDT to naira swaps. 
• He said that since the cNGN is pegged one-to-one with the Nigerian naira, users can now trade their naira directly onchain.  
• They no longer need to go through several hoops and intermediaries involved in off-chain P2P trades — which are prone to fraud and settlement disputes— just to get their money onchain to trade with global assets. 
• Asset Chain’s decentralized exchange, which enables these USDT/cNGN swaps, is set to go live imminently. 
• He said: 

“What cNGN does is that it bridges that [fragmentation of liquidity] gap. You don’t need to trust any third party or anything like that. These assets [USDT and naira] can be traded directly on chain.” 

• Data from cNGN’s website shows that approximately 36.3 million cNGN tokens sit on Asset Chain’s infrastructure, more than half of which, according to Aronu, are investments in the Nigerian money market.