Despite approving eNaira in Nigeria, the Nigerian government is yet to legalize Bitcoin and other cryptocurrencies just like El-Salvador has done already. It is hoped that more favorable policies will be made in the future given the increasing interest in Crypto Currencies.
It is no longer a news that the Nigerian government through the Central Bank has introduced a new digital currency into the country dubbed e-naira whose use had been inaugurated last month in October. This e-naira known as the Central Bank Digital Currency for Nigeria has been accorded the same value as naira and approved for transactions within the Nigerian banks and across the country.
However, the major concern here is: Does approving the digital currency e-naira amount to approving Bitcoin and other cryptocurrencies？
Obviously the answer to this question will always come in the negative. In fact the Nigerian government through the Central Bank has increased its haunt and limitation of accounts involved in Crypto currency transactions showing that the later has not finally been approved.
It is highly unclear what the Nigerian government and Central Bank seeks to achieve by doing so at a time when the whole world is embracing Crypto currencies and legalizing it especially the great Crypto world El-Salvador.
Many believe that indulging in Crypto Currencies will endanger the survival of the Nigerian banks as the citizens will have to withdraw all their naira and convert it to Crypto. However, this is unlikely the case as traders will still have to spend their money in Naira and not in Crypto except with the introduction of e-naira. We hope that in the future, the government will find a way of addressing the increasing interest in Crypto currency outside e-naira.
What is a central bank digital currency (CBDC)？
CBDC is an acronym for Central Bank Digital Currency which is an electronic form of central bank money that citizens can use to make digital payments and store value. When a country issues a CBDC, its government will consider it to be legal tender, just like fiat currencies; both CBDC and physical cash would be legally acknowledged as a form of payment and act as a claim on the central bank or government.
Cryptocurrencies, as we know them today, are extremely volatile and lack government backing — CBDCs overcome these concerns while using the same underlying distributed ledger technology of cryptocurrencies. Governments recognize CBDCs as legal tender in the issuing central bank's jurisdiction, meaning anyone can use them for payments and every merchant must accept them.