Going Crypto
NIGERIA
Nigeria became the first African country to roll out a digital currency this week, joining a growing list of nations that are betting on virtual money to cut transaction costs and boost participation in the formal financial system, Bloomberg reported.
The new eNaira currency comes months after the country’s central bank outlawed banks and other financial institutions from using cryptocurrencies such as Bitcoin and Ethereum, saying the latter two posed a threat to the financial system.
The eNaira is considered a national currency, unlike its crypto counterparts which are prized – in part – because they are connected to the fiat currency.
Nigeria’s new digital currency, instead, will complement the physical naira, which has weakened 5.6 percent this year despite the central bank’s efforts to stabilize it.
Officials said the eNaira is expected to boost cross-border trade and financial inclusion. President Muhammadu Buhari said it could “increase Nigeria’s gross domestic product by $29 billion over the next 10 years.” The International Monetary Fund estimates that Nigeria’s GDP will reach $480 billion in 2021.
Nigeria joins the Bahamas and the Eastern Caribbean Central Bank in being the first jurisdictions in the world to issue national digital currencies. Earlier this year, China launched a pilot version of its “digital renminbi.”
No comments:
Post a Comment