Nigeria Beats US in Race to Launch a Central Bank Digital Currency (CBDC)
The United States has been effectively left behind in the race for a central bank digital currency, with Nigeria being one of four countries to have their own CBDC. This means that while there is less risk of volatility and greater transparency, the US could still suffer from an overreliance on fiat currencies if they do not come up with something soon.
The “e naira” is a cryptocurrency that has been created by the Central Bank of Nigeria. The CBDC will be used to make payments in the country, replacing the local currency.
The contest to create the world’s first large-scale, fully functioning central bank digital currency (CBDC) has finally been won, and it was won by one of the most improbable contenders.
It isn’t the first CBDC, technically. The Sand Dollar was introduced in the Bahamas, however the eNaira outperforms it in terms of size and breadth of implementation.
To be honest, it all sounds a little hurried, and it seems to be a major risk for Africa’s greatest economy.
The Central Bank of Nigeria outlawed the use of cryptocurrencies in the nation earlier this year, only to reverse that decision soon after.
During the brief period when bitcoin was considered illegal cash, the digital currency’s price in Nigeria skyrocketed, trading at a 40% premium to what the rest of the world was paying.
We’d like to thank analyst Wonder Godzo for breaking the news and compiling this report, which contains some important data regarding the new digital currency.
In reality, just three local television stations attended the press conference, making it a low-key event. Furthermore, no questions from the audience were answered by Nigerian authorities.
At this time, it’s reasonable to state that there are much more unknowns than knowns.
Is it, however, good?
Rather of using a well-known public blockchain like the Stellar Network or Cardano, the CBN went with Bitt, a private startup that produced this incredibly short blog post that seems to emphasize the aims of interoperability and financial inclusivity.
On the surface, it seems to be a good thing. However, it is hard to say how beneficial this would be for Nigerians at this time.
What we can say is that the eNaira will be less free than other cryptocurrencies and will be less dictatorial than the Chinese CBDC.
When it comes to product debuts, this one has a good chance of becoming a disaster.
Nigeria, on the other hand, now has the opportunity to demonstrate that it is well ahead of the game when it comes to digital innovation.
Most rich nations have too much invested in outdated infrastructure to move swiftly on this, therefore Africa is effectively leapfrogging the rest of the globe in FinTech adoption.
Whatever happens with the eNaira, it will serve as a great case study for the dozens of nations that are presently exploring, creating, or implementing CBDCs.
Whatever happens, the government will almost certainly have unparalleled visibility into the financial activity of its people now that the naira has gone digital. So it’s a good thing that Bitcoin is already well-known.
The “enaira website” is an article that discusses the race to launch a Central Bank Digital Currency (CBDC). The article discusses how Nigeria beat the US in launching their CBDC.