The eNaira Saga: Wetin we go Gain
Hi friends, this week has been a great week for the Nigerians and the Buhari administration on their economic strides to become the first African county to launch a digital currency, which is a legal tender. At least Nigeria has made headlines in the global stock exchange news and other economic bulletins the world over. Entering the global headlines isn't the problem, but making history without adequate profit other than a digital currency equivalent to the naira that's already devalued when compared to the dollar and other currencies in the world. Instead of the Central Bank of Nigeria to develop and launch a digital that would compete with the Ghanian Cedis, they brought the same naira and said better possibilities. What possibilities will the naira give in the Foreign Exchange Market?
Nigerians Reaction towards the eNaira
Merely see the attachment of e to the naira made most Nigerians to jubilate that Nigeria has finally entered a digital economy. The question we need to ask ourselves is, what's the value of the eNaira when compared to the US Dollar and other digital currencies like crypto, with cryptocurrency paving way in the global coin market? Just last week, bitcoin appreciated to $60,476.60.Source
What are the Nigerian Leaders Thinking
I thought that Nigeria has better economists who are knowledgeable in cryptocurrency and Forex than El-salvador. El-salvador adopted cryptocurrency as a legal tender in their country. At least El-salvador has given its citizens the freedom to trade with cryptocurrency and in turn reinvest it into infrastructural development and create industries that will employ people in the country. Instead of Nigeria to develop digital currency that will compete with the USD, the CBN is launching a digital currency (eNaira) that is equivalent to the devalued naira. Unlike the cryptocurrency that is built on blockchain technology which ensures the decentralisation of the creation, regulation, and use of cryptocurrency through the use of decentralized computer networks, the eNaira is directly controlled by the CBN, and transactions in eNaira will be made anonymous by the CBN, it still have access to information provided by users and be able to trace transactions.
The most annoying part of the eNaira is that it possesses the same value as the physical naira (does the naira have value?) it's value will rise or fall in relation to the dollar in the same way as the fiat curry. It's therefore unlikely to be as volatile and a cryptocurrency. Some cryptocurrencies - known as Stable coins are pegged to currencies, but none are backed by government.Source
Finally, I've noticed that the ban on cryptocurrency in February by the Nigerian government in collaboration with the CBN was to introduce a digital currency in October. In February, the CBN issued a directives that prohibited banks taking part in financial transactions involving cryptocurrency in which many Nigerian have placed their savings as a hedge against naira depreciation. For me to appreciate the launching of the eNaira by the Buhari administration, they must relate to the public on how the masses would benefit from the project.
