After a year, Nigerians are still shying away from their CBDC, according to Bloomberg. At the beginning of 2021, the authorities banned bitcoin (BTC) and cryptocurrencies to finally launch their CBDC in October of the same year. The rejection of eNaira is great news as all states prepare to impose their CBDC, central digital currency, in order to control their citizens.
It is often censorship and prohibitions that encourage people to find alternative solutions, and thus to innovate. As in other countries which have wanted to cut off supplies to its opponents, the Nigerians who demonstrated against the police brutality in October 2020 turned even more massively to bitcoin (BTC), and they have no desire to give it up.
The ban on bitcoin: a limited or no effect
With bitcoin (BTC), the government no longer has a hold on its opponents. However, its ban did not have the desired effect, since users use Peer-to-Peer exchanges. The introduction of eNaira obviously has no impact either. Nigeria is, according to Paxful, the second country in the world in terms of Peer-to-peer BTC transactions. According to data from Dance Corner, Nigerians traded 60,215 BTC between 2015 and 2020. This was worth over $566 million, a figure surpassed only by the United States. The highest volume (20,504.50) was traded in 2020. Between January and September 2020, Paxful reported a 137% increase in new signups on its platform. This activity goes beyond traditional P2P platforms: many Nigerians also trade cryptocurrency directly with each other. chain analysis describes the exponential growth in the use of cryptos as inevitable in Africa: sending funds to and from abroad, buying goods, etc.
The Nigerian CBDC shunned
After bashing and banning cryptocurrencies, Nigerians do not understand why they should embrace CBDC. With an average age of 20, the population is wary of the government’s proposals. To give eNaira a boost, a 5% bonus is given to motorized rickshaw drivers and passengers who use it. In vain: according to official statistics, only one in 200 people have already used this CBDC.
When Nigeria (about 211 million people) became the first African nation to launch a centralized digital currency, it was targeting the nearly 40 million unbanked people in the country. Unbanked, of course, but there is still a mobile phone penetration rate of 81%. As we (almost) all know now, there is nothing altruistic about CBDCs. The governor of the central bank, Godwin Emefieleeven said: The destination, as far as I am concerned, is to achieve a 100% cashless economy in Nigeria. “.
Africa’s largest economy has devalued its currency, the naira, about six times since 2015. Economist Tatonga Rusike predicts further devaluations to come. With rampant inflation, high bank charges and various bans, Nigerians prefer bitcoin (BTC) to any other currency. They did not need great speeches on the economy to adopt THE practical currency, with low transaction costs, uncensorable. They are seriously outdistancing sleepy Europeans who still don’t seem to understand what is happening with CBDCs.
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