My take on E-Naira.
If the purpose of E-Naira is to help naira gain better valuation or appreciation, then this is already a failed project. Because, there is already an excess flow of the physical Naira.
Making a digital copy of naira would only make it easier for the CBN under Godwin Emefiele to produce more naira [E-Naira], because unlike cryptocurrency which is decentralised, E-Naira is solely controlled by the CBN.
It’s no news that the Nigeria Government under President Buhari, have had series of poorly executed decisions which has ravaged both the financial and economical institutions in Nigeria.
To be exact, the Central Bank of Nigeria [CBN] has gone after its citizens and institutions, for personal or for the acclaimed benefits of the country.
Few of these instances are the shutting down of citizens account during the #EndSARS protests that lasted for nearly a month late 2020.
An act which was condemned by various organisations, and finally overturned by a competent court in Nigeria, in favour of those whose accounts were blocked.
Just recently, the CBN went after AbokiFx to close the platform dealings, siting the listing of the platform concerning naira as the reason for naira’s devaluation.
Why Naira is failing and E-Naira won’t last.
For a government whose major singing tone has been placed on patrotism, the choice to give such an integral part of its economy [E-Naira] to a foreign company BITT.INC, is an outright smack to Nigerians faces.
So, why should an average Nigerian patronise the use of E-₦, when it’s being run by a foreign company?
Nigeria is blessed with multi-talented individuals who are owners of major thriving Fintech organisations.
Some of these organisations are flutterwave whose CEO is a Nigerian by name Olugbenga Agboola and Paystack, ceo Shola Akinlade.
Flutterwave and paystack are leading payment platforms that have gained worldwide recognition for their financial solutions and business brilliance.
Which begs the question, ‘what is the Federal Government of Nigeria hiding from its citizens by partnering with a foreign company for the management of E-Naira?
Bear in mind, earlier this year, the Federal Government of Nigeria had banned the use of cryptocurrency and it’s related transactions in Nigeria.
So why go with Bitt.inc a company which has publicised it’s ties with crypto and blockchain activity, instead of a localised Flutterwave or paystack, who will uphold the crypto ban during transactions?
An extract from BITT.COM regarding control of the Central Bank Digital Currency [CDBC].
Central Banks will be able to monitor and exercise a measure of control in order to effect, for example, freezing and/or blacklisting of accounts/wallets as necessary. “The widespread use of CBDC and the obsolescence of paper currency would be helpful in discouraging tax evasion, money laundering, and other illegal activities” according to the National Bureau of Economic Research.
Your guess is as good as mine, many Fintech companies in Nigeria are run by youths.
The same youths whom have been at the receiving end of every bad decisions of the Buhari led administration, including being called “lazy youths” by the President himself on national TV.
So, these Fintech companies would not want to align with an administration whose major policies have scuffled freedom of speech.
And has promoted disunity amongst citizens through favoritism and antagonising speeches.
But like any failing organisation would, the Nigeria government chose to bring in foreigners to do a citizens job, even when this current administration prides themselves as patriots.
One of the major purpose of money is for the exchange of goods and services.
One monetary system that has been driving these transactions in the past few years, is the decentralised digital currency, many know as cryptocurrency.
Sadly, CBN launching E-Naira after banning the use of crypto in Nigeria, all but doomed E-Naira.
E-Naira doomed by Crypto ban in Nigeria.
According to CBN, features of E-Naira:
- No transaction fee.
- No note printing cost.
- Eradication of negative health issues associated with the use of physical currency notes.
If you are familiar with how the cryptocurrency work, you will notice that the more cryptocurrency in circulation, the higher the value of the specific cryptocurrency.
One way to do this, is by exchanging the new but less valued cryptocurrency [E-Naira] with the older and more valuable cryptocurrencies like Ethereum, bitcoin and others.
Take for Example E-Naira and bitcoin.
Central Bank of Nigeria, would have partnered with exchanges like Latoken or Binance for the launch of this E-Naira.
E-Naira starting at a trading value of 1E-₦ =
0.0024 United States Dollar.
A lot of crypto investors including Nigerians would exchange their digital assets like Bitcoin to own a certain amount of the new digital currency E-Naira.
This way, the much needed global acceptance of E-₦ will kick off in a unified form, as naira will now get to more people around the world.
Giving the falling currency the much needed recognition it so much crave.
And, since naira is limited in supply, its only a matter of time before CBN has more digital assets in bitcoin and others, than it does in naira.
Also, the need to keep acquiring foreign dollar to meet Nigerians trading demand would have been fixed by the introduction of E-Naira.
Also, instead of selling naira to foreign companies or banks for dollars, the Central Bank of Nigeria will instead trade bitcoin, Ethereum and others for dollars.
Unfortunately, the above example is not the case.
The Federal Government of Nigeria through CBN, under Godwin Emefiele, had earlier this year sent a circular to all banks stopping the trade of cryptocurrency in Nigeria.
Siting the falling naira and terrorist funding as a reason for the ban.
But note that, before the ban on cryptocurrency, naira was trading at ₦365 to $1.
As at the time of collating these information, naira is trading at ₦411 to $1.
Also, terrorist attacks have also spiked and just few weeks ago, the brother to former presidential candidate Omoleye Sowore was killed by gunmen, multiple attacks at the Nigerian defence arm in the North and East.
Which makes the banning of crypto to fix the insecurity and naira collapse, yet another decision to be added to this administration list of failed approach, in dealing with vital issues.
Well, according to CBN, E-Naira launches October 1st, 2021. Fingers crossed on how this will go.
Do you share similar deductions with Allroundreview or you have a different opinion?
Kindly let us know your thoughts in the comment section below.
Until the next one, do have a wonderful day.