Blockchain could have prevented Nigeria’s naira scarcity effects

A group of local blockchain experts discussed how blockchain technology can help solve economic problems in Nigeria and throughout the African continent. In their discussion, Nigeria’s naira flow shortage was used as a case study.

At the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN)’s Digital Assets Summit 2023, held in Abuja, the nation’s capital, stakeholders discussed the decision by the past government to mint new naira notes and Nigeria’s recent efforts to increase its Central Bank Digital Currency (CBDC) adoption which all led to a shortage in the flow of naira at the time.

According to Christopher Eniayemo, Co-Founder of Sahara ICP Hub West Africa, the decision to print new naira notes could have been made within the decentralized finance (DeFi) system, thereby ensuring Nigerians have a say and helping them prepare better for the switch.

“Bringing blockchain system to Nigeria and Africa as a whole will help promote the advancement of DeFi and give citizens control over their own monies and economy”

Blockchain technology provides the technical infrastructure and principles that empower DeFi to operate in a decentralized, transparent and secure manner, offering a wide array of financial services to users without the need for traditional financial intermediaries.

However, the current Nigerian President, Bola Tinubu released a manifesto during his campaign which, if implemented, would enable the use of blockchain technology and cryptocurrencies in the nation’s banking and finance sector.

Related: Nigeria central bank missed opportunity for blockchain regulation in 2021 — Convexity CEO

The manifesto suggests reviewing existing Nigerian Security Exchange Commission (SEC) regulations on digital assets to make them more business-friendly. The new regulation provides a framework for regulating digital assets like cryptocurrencies and other digital tokens in Nigeria.

Nigeria drastically reduced the amount of cash individuals and businesses can withdraw in its attempt to push the “cashless-Nigeria” policy and increase the use of its CBDC – eNaira in Dec. 2023.

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