Nigeria recently joined the Bahamas and the Eastern Caribbean Reserve Bank as the first African government to launch its digital currency, the “eNaira.”
What is a digital currency, and how does it work?
It is a new type of currency with a high level of security. Because it is decentralized, it does not require the presence of an intermediary such as a bank to trade.
When trading, transactions are recorded in an encrypted format in a digital storage system known as “blockchain,” hence “cryptocurrency.”
What is the purpose of Nigeria’s digital currency?
The Reserve Bank has already stated various grounds for the issuance of “eNaira,” including:
- Development of an efficient and inclusive economic system.
- Assistance with remittances from expatriates.
- Cut the cost of dealing with cash.
- Supporting a flexible payment method for income tax collection.
- Improving cross-border commerce efficacy.
Does Nigeria have what it takes to take this step?
Given the presence of current technology and the ability to cope with them, Nigeria is sure to succeed in this phase.
According to reports, the central bank is expected to launch eNaira through its cryptocurrency management system.