Reshab AgarwalNigeria’s CBDC eNaira is finally announced making them the first African country to introduce a digital currency. This is great news as the country is expected to increase $29 billion in GDP over the next 10 years due to this. They have also been one of the first to bet on blockchain as the future tech for cutting transaction costs and increasing participation.
The release of Nigeria’s CBDC eNaira
Did you know back in Feb 2021, the central banks in Nigeria asked banks and companies not to involve in cryptocurrencies? Their reasoning for the same was that crypto poses a threat to the system. But now it seems that the government has passed on that belief. The launch of a CBDC has changed things completely for Nigeria putting them much ahead of the competition globally.
There are already 2.5 million daily visits o the platform. And more than 2000 customers have already been onboarded by the 33 banks that have been integrated on the platform. Until now almost $1.2 million Naira has been minted and as time passes on we can expect this number to increase. The eNaira is backed by the physical currency Naira and will have the same value. That means citizens can exchange their physical currency for a digital one. This is unlike other cryptocurrencies that are backed by the technology they use and their adoption.
The central bank also thinks that the launch of the CBDC will be greater for increasing cross-border trade. It will improve the transaction efficiency and the monetary policy.
Other countries releasing CBDCs
Apart from Nigeria, the Bahamas and Eastern Caribbean Central Bank have released their own digital currency. Other major nations like the US, China, India, Germany are also working on their CBDC. In fact, China has even launched a pilot of its “digital renminbi” a while back. It can be expected that China will be the first among the larger countries to launch its own CBDC. This is because they have already banned everything else and plan to replace them with what they develop.
What are your thoughts on Nigeria’s CBDC eNaira? And do you think that poorer countries will benefit from the launch of their own central bank digital currency? Let us know in the comments below. Also, if you found our content informative do like and share it with your friends.
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