Nigeria, Africa’s largest economy, launched the continent’s first digital currency, e-naira. The launch also places Nigeria among the very few countries in the world to have implemented an electronic money system that leaders hope will help boost the country’s GDP and fight inflation.
The official launch of the digital currency of the Central Bank of Nigeria, CBDC, took place on Monday at a state house in Abuja with the participation of senior government officials.
Nigeria’s President Muhammadu Bukhari introduced e-naira and said it could potentially increase Nigeria’s gross domestic product to $ 29 billion over the next decade.
Blockchain expert Jadel Chidi welcomes the launch.
“Digital currency helps speed up payments as well [is] presumably cheaper than the conventional payment systems you already have. You make transactions from one person to another; you don’t need a middleman, ”Chidi said.
The e-Naira app was launched and made available for download by citizens immediately after launch.
Digital currency is a means of payment that exists exclusively in electronic form. Other types include cryptocurrency, which authorities banned in February, saying its volatility exposes citizens to enormous financial risks.
The government expects e-Naira to improve savings in an currently weakening Nigeria, as well as increase the availability of financial services for millions of citizens.
But digital money experts like Janet Catio say internet penetration and tech savvy can create initial problems.
“For every new technology, people have to learn how to use it. This is no different from digital currency, e-naira, or even cryptocurrency. People need to learn how to use these things, ”said Kaati.
Jadel Chidi said there are also concerns about the regulation of e-Naira by the Nigerian government.
“Ideally, cryptocurrency should not be centralized, but central bank digital currencies should be centralized because they will be managed by a central authority, in this case CBN, and this undermines the purpose of digital currency or decentralization,” he said. Chidi.
The use of digital currencies in Nigeria has increased in recent years, especially among the younger population.
Authorities say they can better track transactions with e-Naira, restrict black market fiat trading, protect against devaluation, and reduce inflation.