The Central Bank of Nigeria has planned to launch its CBDC (central bank digital currency) pilot on October1, 2021. The Bank may launch a proof of concept by the end of the year.
Nigeria, July 24, 2021 /AlexaBlockchain/ – Latest in the list of central banks announcing a digital currency is Nigeria. The Central Bank of Nigeria’s information technology director, Rakiya Mohammed, revealed during a webinar that the West African country will launch its CBDC pilot on October1, 2021, reports The Peoples Gazette.
Central Banks Across The Globe Pushing For CBDC
The interest in Bitcoin and other cryptocurrencies has grown significantly in the recent past. The new interest is equally among retail users as well as businesses.
If we look at the developments around cryptocurrency this year, it is clear that there is wider level of acceptance in this new system which was missing a year ago.
Governments and central banks that were earlier reluctant to recognize Bitcoin and other altcoin cryptocurrencies are now amid huge pressure with the growing adoption among enterprises. A trend has now emerged amongst Central banks to issue digital version of the fiat as there is little scope for them to counter public digital currencies like Bitcoin.
GIANT – Nigeria’s CBDC Project
The Central Bank of Nigeria has been developing its CBDC project “GIANT” since 2017. GIANT is built on the open-source Hyperledger Fabric blockchain. Apart from the planned CBDC pilot, the IT director said the bank might conduct a Proof of Concept (PoC) before the end of this year.
During the presentation, the Rakiya Mohammed stated that about 80 per cent of central banks worldwide were currently entertaining the possibility of issuing central bank digital currency (CBDC), and Nigeria could not be left behind.
The Central Bank of Nigeria believes that CBDC would be beneficial for macro and growth management, cross-border trade support and most importantly for financial inclusion.
Additionally, the Nigerian central bank is of the view that CBDC has the potential to bring more benefits ranging from higher efficiency for cross-border payments, better monetary policy execution, improved tax collection, and the facilitation of targeted social programs.
Yes To CBDC No to Crypto
Nigeria is working on its CBDC, and now it has announced a pilot for the same. However, it is not allowing its citizens to adopt Bitcoin and other cryptocurrencies. In February, The Central Bank of Nigeria banned the trading of cryptocurrencies due to fears over potential fraudulent investments, money laundering, terrorism financing, and other crimes. The CBN directed banks and other financial institutions in Nigeria to close customers’ accounts that were associated with the trading of cryptocurrencies.
Despite the ban and restrictions on trading, Nigeria is one of the world’s largest Bitcoin trading markets. According to a March survey on crypto, 32% of people in Nigeria use crypto, with the majority using peer-to-peer trading via exchanges and other platforms to facilitate their exchange of Bitcoin.
Nigeria’s annual inflation have also spiked to around 18%, which has devalued the Naira and turned a tech-savvy population towards Bitcoin and other cryptocurrencies.