How Stablecoins are Helping Absorb the Nigeria Crypto Regulation Shock

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The very first stablecoin, USDT aka Tether, was originally launched in 2014 on the Bitcoin blockchain. Since then, the world has seen an explosion of stablecoins, many pegged to different fiat currencies, gold, silver, and even special drawing rights (SDR).

At times of high crypto volatility, traders often find refuge in stablecoins, and while highly controversial, USDT has provided much relief to many crypto exchanges and their customers who, for several years now, have been unable to secure stable USD banking relationships. 

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SEE ALSOCentral Bank of Nigeria Clarifies its Position on Crypto and Says it is ‘Not Comfortable with Crypto at this Time’

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Following the recent announcement of the Central Bank of Nigeria (CBN), stablecoins like NGNT also have the potential to act as a shock absorber for the Nigerian crypto community.

While not a legal tender, NGNT is pegged (1:1) to the value of Naira and is uniquely backed by two USD stablecoins – USDC and BUSD. Importantly, USD reserves backing both stablecoins are held by regulated custodians in the U.S.

Initially available on Ethereum, NGNT went live last week on the Binance Smart Chain which boasts EVM compatibility, high performances, and low mining fees. With the recent network congestion and the high mining fees experienced on Ethereum, traders and exchanges alike are first to welcome more affordable and faster NGNT transactions on BSC.

Leading exchanges in Nigeria such as Busha, Buycoins and Paxful are already offering their customers the ability to trade BTC and other cryptos for NGNT. With stable banking relationships no longer available, other exchanges in Nigeria may soon follow and adopt NGNT as an alternative to fiat.

Efficiently securing a broad range of stablecoins and other blockchain assets can be challenging and costly. It often requires specialist infrastructure partners. THRESH0LD is helping crypto businesses, many in Nigeria and Africa, with solutions to help boost profitability without compromising on security.

The platform, secured by blockchain-agnostic multiparty computation, connects its clients to over a dozen blockchains and two dozen transaction protocols. It is first to support NGNT on both the Ethereum and BSC blockchains, and companies like Busha and Buycoins are already leveraging THRESH0LD services for the benefit of their customers.

To help the crypto community in these challenging times, THRESH0LD has recently announced free access for Nigerian businesses to four blockchains, where the most popular stablecoins are exchanged.

These include:

  • ETH (ERC20)
  • TRX (TRC20)
  • BNB
  • BSC (BEP20)

The unexpected CBN challenge has pushed the community to further innovate. Solutions such as USD-backed NGNT transacted on the Binance Smart Chain and secured by next-generation multiparty computation have emerged within 10 days of the announcement, demonstrating, once again, the ingenuity, resilience, and the spirit of collaboration within the African ecosystem.

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About THRESH0LD

The company offers keyless wallet infrastructure services designed to help crypto businesses boost their profitability without compromising on security or controls. 

The turnkey SaaS solution requires a single, simple API integration to connect businesses to 14 blockchain networks, 26 transaction protocols, and hundreds of thousands of digital assets including the major crypto currencies and stablecoins. 

The platform is secured by next-generation multiparty computation (MPC) to remove the risk of private theft and boasts a bank-grade policy engine helping businesses mitigate risk of key-person dependency and collusion. 

The company is proud to work with several great African companies such as Busha, Buycoins and Tradefada and offers cost-saving solutions to businesses of all sizes.

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RECOMMENDED READING: Global Financial Body, FATF, Puts Out Revised Standards on Stablecoins and Calls for Implementation as a Matter of Priority

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