Bit Sika and LinovaCapital have announced a Nigerian Naira backed stablecoin called Africa Stable-Coin (ABCD) built on the BinanceChain.
2019 has seen a massive spike in stablecoin developments in the cryptocurrency ecosystem. Africa Stable-Coin wants to bring stablecoins to Nigeria to leverage digital currencies and fiat.
A stablecoin is a digital currency pegged to the value of a traditional currency. Stablecoins continue to increase in popularity as the extremely volatile nature of the market in recent times has led many to find solace in asset-backed currencies.
For some, stablecoins provide a better unit of account, store of value, and medium exchange than regular cryptocurrencies.
The Africa Stable-Coin (ABCD)
Nigeria currently has the biggest population and economy in Africa. The West African state is a fertile market for digital payments and innovations. Africa Stable-Coin (ABCD) seeks to leverage the Naira’s liquidity and the flexibility of digital currencies.
Every ABCD token will be backed by a Naira initially, with plans to expand the fiat basket with other African currencies.
The digital currency will be issued by the ABCD Collective, which is led by Bit Sika (founding partner) and Linova Capital (financial partner), according to the project’s whitepaper. The collective will supervise the rules for the generation and redemption of ABCD.
In the last year, stablecoins have come under scrutiny due to the lack of transparency that shrouds that section of the industry. One of the biggest stablecoins, Tether (TUSD), has experienced several backlashes due to its lack of transparency.
To avoid mistrust, an independent Certified Public Accountant will audit the ABCD Collective’s funds at the end of every month. Africa Stable-Coin will be supported by 9 exchanges, including Busha and Bitmama.
ABCD is built on BinanceChain to achieve what the project describes as “speed, affordability, and ultra-UX.” The main application driving the adoption of this stablecoin is the BitSika app.
Bit Sika is a new financial payments startup that launched its first application this year after the project was enrolled in the Binance Labs Incubation Program in 2019. CEO of the project met Jack Dorsey during his trip to Ghana.
Africa Stable-Coin (ABCD) is expected to go live in January 2020.