Nigeria, the largest economy in Africa, launched the eNaira, the first digital currency on the African continent. The announcement also listed Nigeria as one of the few countries in the world to have adopted a digital currency system, and leaders hope this will help boost the country’s GDP and fight inflation.
On Monday, the CBDC digital currency of the Central Bank of Nigeria was officially presented at the Abuja statehouse, attended by high-ranking government officials.
Nigerian Government Optimistic About eNaira
Nigerian President Muhammadu Buhari launched e-Naira and stated that it could increase Nigeria’s GDP by $29 billion over the next decade.
With eNaira, Nigeria became the first country in sub-Saharan Africa to fully adopt a digital currency, joining China and a few other countries using or piloting central bank-regulated electronic tender.
The president stated that the new digital currency will improve cross-border trade, improve financial inclusion for people outside the formal economy, and increase remittances.
The eNaira, which was originally supposed to start on October 1, was postponed by the central bank on the grounds that the country is celebrating the independence celebrations. However, it was later launched on Monday, the 25th of October.
In an interview with David Effiong (Davizoe), a blockchain consultant and CEO of the Blockchain Education Invasion (BEI), he spoke about e-naira and his views on the future of blockchain in Nigeria and Africa as a whole.
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Edited excerpts follow:
Q: What are your thoughts on the E-naira that’s about to be launched by the Central Bank of Nigeria?
A: It’s a very great initiative, it shows that Nigeria is now updated unlike before when we joined the other nations late. Recently, Nigerians have been at the forefront globally when it comes to crypto adoption.
According to data from Statista in March, 32% of respondents in Nigeria use crypto. Nigeria also ranked eighth in Chainalysis’ 2020 report on cryptocurrency adoption around the world. This surge happened during the EndSARS protest against police brutality where the organization used bitcoin to raise funds for protesters.
Q: Is the E-naira any different from the CBDCs launched by other countries?
A: I can’t really say, because we haven’t gotten more details on the Nigeria CBDC concerning what it’s backed with, unlike the US proposed CBDC which is partially backed by reserves, under a system known as fractional-reserve banking.
Central banks around the world are looking to create digital versions of their currencies, known as CBDCs, in response to the growth of online payments and to compete with cryptocurrencies that are beyond the control of governments and global regulators.
Last year, China became the first major economy to launch a test version of a digital currency. Since then, at least five countries have launched their virtual currencies.
Q: Do you think the E-naira will eliminate the use of fiat in Nigeria?
A: YES because it’s a paradigm shift and everyone needs to adopt the digital Economy.
Q: How will the payment system in Nigeria be affected by the E-naira?
A: According to CBN, it will make the transfer of currencies easy across different countries that also have the CBDC due to the pairing of different currencies.
Q: What are your thoughts on the future of Blockchain in Nigeria?
A: The future of blockchain in Nigeria is still far. This is because the government is not interested in doing that. Therefore, the work is left with few passionate individuals who are attacked by the government.
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