Build your own. That’s the approach Nigeria is taking towards cryptocurrencies. On Monday the North African nation announced it would be collaborating with Bitt Inc as a technical partner in its bid to launch “eNaira” the nation’s own cryptocurrency. Nigeria becomes the second nation to launch its own version of the blockchain-enabled currency, with Barbados announcing “Dcash” in April.
In February Nigeria’s central bank announced it would not allow financial institutions to trade in cryptocurrency. In launching eNaira, Reuters reported that Central Bank Governor Godwin Emefiele stated the eNaira would operate as a wallet against which customers can hold existing funds in their bank account. In a statement on Monday, Emefiele said the currency would accelerate financial inclusion and enable cheaper and faster remittance inflows.
In an announcement in Abuja this week, Emefiele listed the benefits of the Central Bank Digital Currency (CBDC) to include increased cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows, easier targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency, and tax collection.
Nigeria currently has an inflation rate of 17%, the project is in its pilot phase and hopes to reduce the cost of transactions. In the Central Banks press release, it notes that over 85% of central banks are now looking at the viability of digital currencies and that in making this decision Nigeria would be on the front foot of that trend.
“Project Giant, as the Nigerian CBDC pilot is known, has been a long and thorough process for the CBN, with the Bank’s decision to digitize the Naira in 2017, following extensive research and explorations. Given the significant explosion in the use of digital payments and the rise in the digital economy, the CBN’s decision follows an unmistakable global trend in which over 85 percent of Central Banks are now considering adopting digital currencies in their countries.” – Osita Nwanisobi, Director, Corporate Communications at the Central Bank of Nigeria.