Information gathered from Reuters reveals that Nigeria plans to launch central bank currency by the end of this year.
Last month, Godwin Emefiele, the CBN Governor, made a U-turn on the ban placed on Bitcoin and other cryptocurrencies by “allowing” them. The CBN had previously planned to restrict the activity of cryptocurrencies in the country by placing regulatory sanctions on businesses that make use of cryptocurrencies
Now, it looks like the Nigerian officials are trying to embrace blockchain technology.
The central bank of Nigeria digital currency has been in the making for years
Despite the attitude of the Nigerian government towards fintech, it is glaring that the central bank has been working on creating a digital currency for the past two years.
Rakiya Mohammed, the Central Bank of Nigeria Director of Information Technology, explained what most of the other countries have talked about in the past; and that is the fact that Nigeria will also be involved in the technological revolution.
In her words, she said; “We’re all aware that about 80% of central banks in the world are exploring the possibility of issuing central bank digital currency, and Nigeria cannot be left behind.”
According to her, the CBN previously restricted the activity of Bitcoin to protect its citizens. In 2018, the Central Bank of Nigeria stated that there is no legal action that can be taken if things go wrong in a market that is not regulated. They also linked their previous actions against Bitcoin to fraudulent activities like money laundering and funding terrorism. Mohammed stated that a central bank digital currency will bring financial inclusion and will also have the support of the Nigerian government.
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According to her, “If you have a central bank digital currency that is backed by the government, then people can make transactions online without fear of any default.”
Will this mark the end of privacy?
As mentioned previously by billionaire investor Ray Dalio, governments will do everything within their power to exercise control of their money, even if it means making the competitors appear illegal. According to him, “every country treasures its monopoly on controlling supply and demand. They don’t want other monies to be operating or competing, because things can get out of control.”
Anthony Pompliano opposed this idea by saying that no government can ban Bitcoin. He also stated that having a coordinated global action can make life unbearable for Bitcoin users. And as cryptocurrencies become more popular in finance, policymakers and regulators may be compelled to coordinate the activities of Bitcoin users.
Unlike private cryptos that operate on decentralized networks, central bank cryptocurrencies would be given and controlled by a central bank. This will allow them to track all transactions in their economies.
This is a huge blow to privacy. Judging from the way different U.K banks are not accepting cryptocurrency transactions recently, there seems to be a fearful future for central bank currencies where transactions that are viewed to be “against the state” will also be refused.
