Nigeria 1st country to cross the Rubicon in Crypto with the CBDC

Nigeria is not waiting. A country with a particularly young and digitized population, this country is ahead on many points. In particular crypto currencies. As the great Western powers are scratching their heads over whether they will cross the Rubicon with a CBDC, the Nigerien president has not waited. Muhammadu Buhari officially launched the eNaira.

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CBDCs, a crypto to control them all

Is Nigeria Making History? As all countries around the world are studying the development of the CBDC, Nigeria is the first to take the plunge. And at full power.

What is the CBDC? If for traditional investors, Bitcoin and Ethereum are the most interesting cryptocurrencies, this is not the opinion of everyone. If you were a central banker, you would think otherwise. Because this bitcoin, decentralized, independent and cross-border, calls into question the existence of the dollars, the euro, and your existence as a central banker.

So what to do? The CBDC is the dead cat bounce of classic finance. It’s the last leap of a dying world. The CBDC, which stands for Central Bank Digital Currency, is a central bank crypto. It is the crypto that the central banks of the countries will issue, control and disseminate when they understand how the blockchain works. And also how the economy reacts to this bomb.

Because nothing is certain and the questions are legion. Can CBDCs play a role in the economy of the future? Will these tokens be accepted by a population that has the choice of having real crypto on the side? Won’t the CBDCs hurt the economy even more, and commercial banks in particular?

All of these questions are the reasons why the eyes of the whole world are now on Nigeria.

Read also – “The Madness Continues: $ 17 Million Bitcoin Found!

The World Economic Laboratory

Nigeria is not Africa’s most promising country for nothing. Nigeria’s population is extremely young, vibrant, and digitized. Much more than most African countries. 2nd GDP in Africa, a mediating age of 18, and the country where Bitcoin exchanges are the most important. The mixture of these factors makes Nigeria the country with the richest and most interesting developments.

Nigeria is the main crypto exchange hub in Africa. However, Nigeria’s central bank, the CBN, banned crypto trading in February 2021. A ban that wanted to protect the country’s financial institutions from the popular craze for digital currencies. But this ban, which mainly hit Nigerien commercial banks, did not really have an effect, as a Guardian report revealed. The latter noted that cryptocurrency exchange platforms had on the contrary noted an increase in registrations.

Continuing its efforts to preserve its power, the Central Bank of Nigeria has partnered with a FinTech startup, Bitt Inc., to develop its own CBDC. A world premiere, at a time when other countries are still at the stage of study and reflection.

This project seems rather well received by the population. Sold as a way to push the boundaries of the payment system and make financial transactions easier and more transparent. Objectives which are in line with the ambitions of the young population of Nigeria. This project should also be followed by several development phases

“Since the eNaira is a journey, the launch marks the first step, which will continue with a series of additional platform modifications, capabilities and enhancements,” said Osita Nwanisobi, corporate communications director of the CBN, in a statement on Saturday.

The CBDC is the enemy of banks

Called eNaira, Nigeria’s CBDC is therefore under the responsibility of the central bank. The CBN must take care of its emission, its broadcasting, its distribution, its repurchase and its destruction. In short, all the classic missions of a central bank vis-à-vis money.

What is interesting to note is that it is not the young people and the population who seem to oppose this project. In our Western countries, we see all supporters of Bitcoin and cryptocurrencies fiercely opposing attempts to create CBDCs. But in Nigeria, this announcement was widely accepted. It is the banks that are having a hard time digesting the news. The latter see their role disappearing.

Commercial banks serve as intermediaries between central banks and the population. This beautiful place of middle man allows them to build their business and generate astronomical profits. And sometimes equivalent economic crises.

Still, they seem to see their ends approaching. The Guardian reported that “banking executives are extremely concerned that widespread adoption of eNaira could reduce the volume of business executed by banks and transaction revenues.” The source of this concern? ENaira transactions will be peer-to-peer and will not require the intervention of banks.

Nigeria is not the only African country that is working on the creation of the CBDC, although it is the only one that has taken the plunge. South Africa is also particularly interested in CBDCs as well as cryptocurrencies. But Ghana, Morocco, Egypt, and Kenya are also on the path to building a national crypto.

Examples that the countries of the economic north, the USA and the European Union in the lead, will probably observe closely. Because in this way, they will be able to study the impact of the CBDC on the economies, and see the advantages and the possible dangers that it represents for the State.

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