Nigeria launches eNaira, the CBDC that seeks to compete with bitcoin

Nigeria launches eNaira, the CBDC that seeks to compete with bitcoin

Key facts:
  • They assure that the eNaira will be a CBDC available to all social strata.

  • They claim that the CBDC will be activated today, but it is unclear when it will be able to be used.

The Central Bank of Nigeria on Monday made official the launch of its own central bank digital currency (CBDC), the eNaira; that was born as a response to the wide use of cryptocurrencies in that country.

In a release posted on its official website, the Bank highlighted that the launch of eNaira is the culmination of “several years of research work” on the limits of the payment system, to make transactions easier and more fluid “For all strata of society.”

Indicates the government entity that the CBDC will be activated today and that it will be the president of that country, Muhammadu Buhari, who will announce the launch, marking a “step forward” in the evolution of money. They also guarantee that the eNaira will be accessible to everyone.

They clarify that today’s announcement is part of the first step of the “journey” that eNaira entails, and that now comes a “series of modifications, capabilities and additional modifications” of the platform.

The Central Bank of Nigeria will continue to work with relevant partners to ensure a seamless process, which will benefit all users, especially those in rural areas and the unbanked population.

Central Bank of Nigeria (BCN).

An alternative path to the growth of bitcoin

Nigeria, more precisely the Central Bank, has had a very murky relationship with bitcoin and the rest of the cryptocurrencies. He even declared all the operations carried out with those assets illegal and threatened sanctions against the banks that allowed the transactions, generating discontent in the population. That was in February, as we reported on CriptoNoticias.

But four months later, the Central Bank backed down and clarified, via Godwin Emefiele (the governor), that a high percentage of Nigerians use digital assets, so the operations with bitcoin and cryptocurrencies were going to be allowed again.

In this sense, it is possible that the arrival of eNaira is a way for the government to cope with the growth in the use of cryptocurrencies in Nigeria, a country that, according to Chainalysis, is the eighth in the world with the highest use, only by behind Ukraine, Russia, Venezuela, China, Kenya, the United States and South Africa.

Nigeria launches eNaira, the CBDC that seeks to compete with bitcoin
Some modifications and tests are still missing so that the eNaira can be used / Source:

One of the world’s first CBDCs

ENaira has joined the list of the -now- eight countries that have their own CBDC. Because of the novelty of the matter, the Bank provided a “structure” to “quickly address any problem that may arise from the pilot implementation of the eNaira ».

On the list of nations with CBDC, the following stand out: Bahamas, with the Sand Dollar; China, with the Digital Yuan (still in development); Saint Kitts and Nevis, with the DCas; Antigua and Barbuda, with the DCash; Santa Lucia, with the DCash; Granada, with the DCash; Sweden, with the e-krona (still in development) and now Nigeria, with the eNeira.

And although they are technological and financial advances in these countries, it should be clarified that these instruments, in general, tend to function as a centralized database, controlled by the State. In fact, governments and those who authorize them, can have access to all the banking movements of citizens.

The clear example is China, which recently said that with the digital yuan, total anonymity will not be possible, under the argument of the fight against money laundering and other crimes that are committed with virtual currencies.

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