We might see a Nigerian central cryptocurrency this year, according to a report by Reuters. This has happened after the governor of the central bank of Nigeria planned to allow crypto. In fact, Nigeria is not the only country planning to do so. We have many other countries like India, US, Russia, and even China planning on launching a central digital currency. It also means that there will be a lot of competition in this space in the near future.
The Nigerian central cryptocurrency
According to the reports, the digital currency that Nigeria is planning to launch this year has been 2 years in the making. Nigeria does not want to be left behind in the technical revolution and hence the adoption of blockchain technology. Their previous negative take on cryptocurrencies was due to skepticism. A lot of illegal activities were happening in the crypto sector back in 2018 and they wanted to protect their citizens.
The clash of private and public cryptocurrencies will be strong. But I highly doubt that any central cryptocurrency will be able to beat Bitcoin or Ethereum for that matter. They can do well, but Bitcoin will still be the market leader.
Central bank cryptocurrencies are not the solution
The idea behind cryptocurrency is to have a decentralized monetary system that is not controlled by any single entity. This is where Bitcoin shines as the currency is based on a decentralized ledger whose entire copy is present on every machine that mines the cryptocurrency. Hence, a particular person or group cannot alter any data on the ledger. So, we can say that the control lies in the hand of the public.
But if a central digital currency is designed it will be controlled by the government. It will be centralized just like fiat currencies and hence might turn out to be inflationary. In fact, governments might even release new tokens in the market just for their own benefit or generate their own coins. The point is it will defeat the sole purpose of crypto, so it’s not the solution.
What do you think about the Nigerian central cryptocurrency which might launch soon? And do you think private cryptocurrencies will be able to compete with public ones? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.