Nigeria is leading the way in the adoption of cryptocurrency in Africa. Self-acclaimed Africa's largest economy is among the world's leaders in terms of cryptocurrency usage, as a report from Nigeria-focused investment firm, pyramid reports revealed.
According to the report, Nigeria has the highest number of cryptocurrency users on the continent, as well as the highest number of Bitcoin wallet downloads from the Google play store.
The report stated that this could be a result of Nigeria's high rate of smartphone penetration and a growing interest in financial services for consumers and businesses alike.
The Google play store recorded a sharp rise in cryptocurrency wallet downloads from Nigeria between August 2020 and January 2021. The coronavirus pandemic was instrumental to that effect as many people especially the youths seek out alternative means of income.
Presently, Nigeria came second only to Singapore globally, demonstrating a clear interest in cryptocurrencies.
In March this year, the Nigerian government announced its plan to launch a national cryptocurrency before the end of the year. This was done to curtail the growing displeasure of the ban on cryptocurrency trading and exchanges in the country at the time. According to the Apex bank governor, "we will create a cryptocurrency for Nigerians to buy and sell". But that was only a promise in the air, the said cryptocurrency now launched a few days ago could not be called a cryptocurrency.
Ā Nigeria has a lot of problems. The country has a high inflation rate, with some estimates putting rates as high as 80 percent, and people are looking for any way to protect their earnings from the government's reckless spending.
The Central Bank of Nigeria (CBN) has tried to stop Nigerians from protecting their money by buying cryptocurrencies, but they have so far failed to stem the tide of Peer-to-Peer trading. They even tried to ban overseas ATM withdrawals, but they were forced to back down on that policy.
However, despite their efforts, Nigerians have found a way around the rules and restrictions placed on them by the government. Nigerians are using Bitcoin to protect their money from the government.
Nigeria's establishment of a national digital currency it's welcome, but the eNaira will not meet the real needs of Nigerians who have already found the answer to their problems with cryptocurrency. Security, speed, efficiency, and anonymity are some of the reasons why more people are using cryptocurrency for transactions.
The launch of e-naira by the Central Bank of Nigeria (CBN) is just a desperate attempt by the Nigerian government to try and bring back under their control Nigerians who are emancipated and have regained power over their money thanks to Bitcoin. The e-naira is a total disaster as a digital currency. It has no use cases that make it different from the usual online banking, it's subject to inflation and more importantly, a political instrument and a tool the government wants to use to try and win the war of attrition against its people.
This attempt by the government will be futile, as crypto enthusiasts in Nigeria already found Bitcoin a better way to safeguard their money from inflation. The e-naira is just a way to push the problem of the paper Naira into the digital world.
The question at hand is: what value does one get for the use of e-naira? Cash transfer would be the most obvious answer, but that is a paradox. This is only a way to wreck people of their hard-earned money. What bank would take your deposits and give you e-naira without a fee? And when you send to someone who would then deposit their e-naira and pay a fee to receive cash.
The only thing that makes sense is to deposit the e-naira into your account with the Central Bank of Nigeria (CBN), and indeed, that is what they propose. So, if I deposit naira into my CBN account and convert to e-naira, what happens to it? It just sits there. It can't appreciate, nor can it be loaned out to gain interest. That means that the only way it can circulate is if I transfer it to someone else who then deposits it into their CBN account, and we're back to the beginning.
What Nigerians want from the government at this time is something that can save their hard-earned money from further going down. People want something that can safeguard their hard-earned money from the power of inflation and the e-Naira doesn't guarantee that. The e-naira may be a solution for one region, but it won't work for the rest of Nigeria. The truth is that a majority of people who have a bank account in Nigeria today are wealthy. It makes no sense to create another digital currency when the real problem Nigeria is facing is inflation.
Inflation is a problem that cannot be solved by digitizing the naira. Digitalizing the naira will make the problem worse as it increases the amount of money in circulation. Banks also have a much lower cap on daily withdrawals and deposits compared to ATMs. So why would someone want e-naira when they can easily withdraw much more cash from an ATM?
The government should rather start auditing bank accounts before pumping money into a system that is already bloated with cash.
What problem will the e-naira solve? This is probably the question many Nigerians are asking.
From what I have seen I don't think the e-naira has the potential to safeguard the naira from further plummeting. It's subject to the same inflationary power as the paper naira. I would be blunt, but I do think what I am about to say will elicit the one heck of a rebuttal from the electronic naira proponent with a lot of money at stake. Folks, the e-naira is a scam, and it will only bring you more problems.
The only use case that I see with the e-naira is that it will enable easy transfer of foreign currency like the US dollar into the country. That's exactly what the government wants, to monitor how much foreign currency people in the diaspora are sending to their people back home. This is another drawback and a slap on the people's faces as no one wants to be controlled on how to use their money.
The e-naira doesn't meet the aspiration of the people since it has no potential to protect the naira from further loss of value against foreign currencies, and also can not be used as a hedge against inflation.
I could tell that the government knew what the people is dealing but turn a blind eye because it's only the people who are suffering but not the rich politicians. But when people is making way to elevate themselves government tried to go between as if they are interested for the good well of the people but I believe they are interested in the ways seeing it's a good potential to become more rich. Cause if they really are that concern then they must take action to the very first problem and the root of all the suffering but I guess no. And from that I can conclude, they do it for self interest not for concern of the people. And I am sad from the painful reality of the world.