A leader of a stakeholder group stated that Nigeria’s proposed digital currency, e-naira, may become a welcome boost to continue efforts to reduce the number of economically excluded Nigerians. However, according to Senator Ihenyen, Stakeholder Chairman of the Blockchain Technology Association of Nigeria (SIBAN), the success of this digital currency will depend on its design.
According to reports, the digital currency proposed by the Central Bank of Nigeria (CBN) will be the Hybrid Central Bank Digital Currency (CBDC), and its pilot phase is scheduled to begin on October 1. This means that e-naira will combine retail and wholesale functions. According to the boss of SIBAN, this means that the issuance of electronic naira will not interfere with the operations of intermediaries such as banks and other financial institutions.
At the same time, Ihenyen told Bitcoin.com News that he believes that the electronic naira (which will be a digital version of fiat currency) “has no magic wand.” He explained:
In terms of its impact on the current state of Naira, as long as the electronic naira is a digital version of Naira, it has no magic wand. At best, it will make cross-border transactions and remittances cheaper and easier-these are two key areas that Nigeria needs to improve. So Nigeria must repair the economy. We must lay a good foundation.
Bitcoin vs Electronic Naira
since director As early as February, after banks stopped providing services to crypto entities, CBN often expressed its desire to bring CBDC into the Nigerian economy. Some analysts said that the central bank has adopted a strategy of stifling cryptocurrency trading while promoting the electronic naira. The goal of this strategy is to make the electronic naira surpass Bitcoin in popularity.
However, when asked whether this is the case, Ihenyen expressed doubts whether CBN or any other central bank-issued digital currency can replace Bitcoin. He cited the very different intentions or goals of those who created decentralized cryptocurrencies like Bitcoin and those who promoted the issuance of CBDC. Ihnion explained:
CBDC and decentralized cryptocurrency are worlds apart. In terms of their nature and design, they serve different purposes. CBN pointed out that the proposed e-naira will run on a private and permissioned blockchain, which will be managed by CBN. This is in stark contrast to the open and permission-free design of Bitcoin and many other cryptocurrencies without central authority. Therefore, this is not actually a question of replacing one with the other.
Therefore, the president of SIBAN did not regard them as competitive innovations, but stated that he believes that cryptocurrency and CBDC are complementary to each other. Therefore, Ihenyen suggested that although CBDC is being launched, “the much-needed risk-based approach to cryptocurrency regulation is still crucial.” He added that cryptocurrencies in the banking and financial system should be viewed as fintech innovations, not as fintech innovations. Threats to the financial system.
Do you agree with the views of the chairman of SIBAN? Tell us what you think in the comments section below.
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