e-Naira promises ‘economic new dawn’ if done right says blockchain expert
Shadrack Kubyane, co-founder of Coronet Blockchain believes Nigeria’s plan to unveil the country’s Central Bank Digital Currency (CBDC), e-Naira, will offer up significant economic opportunities - if managed effectively.
By ‘effectively’ Kubyane means flawlessly executed with the buy-in of citizens.
He said: “The driving force is: the people must be involved, the people must co-create the future they jointly want, and therefore a consultative approach, well beyond an approved implementation partner for the apex bank, is a must. If done right: a new dawn will emerge out of this.”
The Central Bank of Nigeria (CBN) recently announced a partnership with Barbados-based Fintech company Bitt Inc (credited for the launch of the Eastern Caribbean Central Bank CBDC pilot in April 2021) regarding a proposed CBDC pilot known as Project Giant.
According to CBN Governor, Godwin Emefiele, several benefits would result, including “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.”
Kubyane maintains that the government’s strategy will take into consideration Nigeria’s socio-economic reality.
“However, as the country shifts into an implementation mode, with the CBN being the custodian-elect by default of this innovation, a mindfulness on how to phase this implementation - a balancing act in preserving the interests of the two Nigerian territories namely Nigerians within the country’s borders and Nigerians in the diaspora - requires a selfless approach on the part of the apex bank.”
He continued: “The same applies to all the other ECOWAS currencies that are hoping for a digitisation lifeline, or currencies elsewhere. A deep dive into addressing the macro and micro blind spots across the framework, particularly the societal forces that weakened the currency, must now more than ever take centre stage, whilst gears are shifting towards the e-currency format.”
The outbreak of COVID-19 has resulted in greater interest by central banks in implementing CBDCs.
In its 2021 Annual Report, The Bank for International Settlement (BIS) stated that about 85% of central banks globally are already considering issuing their own CBDCs.