Nigeria’s Central Bank wants to monitor your stablecoin transactions. Can the plan actually work?
In its Payments System Vision 2028 (PSV 2028), unveiled on June 1, the Central Bank of Nigeria (CBN) said it intends to run observer nodes on blockchain networks that operate approved stablecoins, enabling the regulator to see stablecoin transactions in real time.
A blockchain network is a shared ledger: instead of one company keeping the only copy of transaction records, many computers maintain copies and keep them in sync. An observer node is a computer connected to the network that keeps a copy of the blockchain and monitors activity on it. It does not validate or submit transactions to the network; its job is to observe.
Running observer nodes on blockchains would give the CBN a direct view of how those tokens are created, moved, or destroyed, rather than making it depend entirely on reports prepared by the companies issuing them. It marks the regulator’s attempt to bring stablecoins into Nigeria’s regulated payments system without giving up visibility over how money moves across it.
Stablecoins are digital currencies built on blockchain technology and designed to maintain a 1:1 peg to real-world currencies, such as the US dollar or naira. If a stablecoin is backed by the naira one-to-one, its issuer—usually private companies—must hold an equivalent amount or more in reserves with banks and other financial institutions, and keep those reserves available when customers buy or redeem the stablecoin.
Originally published by TechCabal.