Blockchain Technology Could Have Resolved Naira Scarcity in Nigeria, Say Local Experts

10:28 am
September 8, 2023
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Blockchain technology holds the potential to address economic challenges in Nigeria and across Africa, according to a group of local blockchain experts. These experts highlighted Nigeria’s shortage of currency flow as a case study. The discussion took place at the Digital Assets Summit 2023 organized by the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) in Abuja.

The shortage of naira flow was largely attributed to the past government’s decision to mint new naira notes and Nigeria’s recent efforts to promote the adoption of its Central Bank Digital Currency (CBDC). Christopher Eniayemo, Co-Founder of Sahara ICP Hub West Africa, stated that the decision to print new naira notes should have been made using the decentralized finance (DeFi) system. Doing so would have given Nigerians a say in the decision and allowed them to better prepare for the transition.

“Bringing blockchain technology to Nigeria and Africa as a whole would promote the development of DeFi and empower citizens to have control over their own money and economy,” said Eniayemo.

Blockchain technology provides the necessary technical infrastructure and principles for DeFi to operate in a decentralized, transparent, and secure manner, thus offering a wide range of financial services without relying on traditional intermediaries.

In the run-up to his campaign, President Bola Tinubu released a manifesto that, if implemented, would allow the use of blockchain technology and cryptocurrencies in Nigeria’s banking and finance sector. The manifesto suggests a review of existing regulations on digital assets by the Nigerian Security Exchange Commission (SEC) to create a more business-friendly environment. This new regulatory framework aims to govern digital assets such as cryptocurrencies and other digital tokens in Nigeria.

In December 2023, Nigeria implemented the “cashless-Nigeria” policy and reduced the amount of cash individuals and businesses could withdraw in an effort to promote the use of its CBDC, the eNaira.

Summary

A group of local blockchain experts in Nigeria believes that implementing blockchain technology could have prevented the scarcity of the country’s currency, the naira. They discussed the shortage of naira flow at the Digital Assets Summit 2023 organized by the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN). The experts highlighted the need for decentralized finance (DeFi) systems and emphasized the potential of blockchain technology to provide transparent and secure financial services. Additionally, President Bola Tinubu’s manifesto supports the use of blockchain technology and cryptocurrencies in Nigeria’s banking and finance sector.

Frequently Asked Questions (FAQ)

Q: What is the Digital Assets Summit 2023?

The Digital Assets Summit 2023 is an event organized by the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN). It serves as a platform for discussions and presentations on the role of blockchain technology and its potential applications in the Nigerian and African economies.

Q: How could blockchain technology have prevented the scarcity of Nigeria’s currency?

The experts believe that implementing a decentralized finance (DeFi) system using blockchain technology would have allowed the decision to print new naira notes to be made collectively by the citizens, ensuring their participation and preparation for the transition.

Q: What is the “cashless-Nigeria” policy?

The “cashless-Nigeria” policy refers to Nigeria’s initiative to reduce the amount of physical cash in circulation and promote digital transactions. The policy aims to encourage the use of the Central Bank Digital Currency (CBDC) and increase financial inclusion in the country.

Q: What is the eNaira?

The eNaira is Nigeria’s Central Bank Digital Currency (CBDC). It is a digital form of the country’s national currency, the naira, designed to enhance the efficiency and security of digital transactions.


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