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Local experts suggest blockchain technology could have mitigated Nigeria’s naira shortage.
According to a group of local blockchain specialists, blockchain technology has the potential to address economic challenges in Nigeria and across the African continent, with Nigeria’s currency flow deficit cited as a relevant example.
During the Digital Assets Summit 2023, organized by the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN) in Abuja, participants examined the previous government’s choice to issue new naira notes — Nigeria’s fiat currency — alongside the nation’s recent initiatives to enhance the adoption of central bank digital currency (CBDC), both of which contributed to a naira flow shortage at that time.
Christopher Eniayemo, a co-founder of Sahara ICP Hub West Africa, stated that the decision to print new naira notes could have been executed within a decentralized finance (DeFi) framework, enabling Nigerians to participate in the process and better prepare for the transition.
“Introducing blockchain systems to Nigeria and Africa as a whole will facilitate the growth of DeFi and empower citizens to take control of their finances and economy.”
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Blockchain technology offers the foundational infrastructure and principles necessary for DeFi to function in a decentralized, transparent, and secure way, providing users with a diverse range of financial services without relying on conventional financial intermediaries.
Nonetheless, the current President of Nigeria, Bola Tinubu, unveiled a manifesto during his campaign that, if enacted, would permit the integration of blockchain technology and cryptocurrencies within the nation’s banking and finance sectors.
Related: Nigeria central bank missed opportunity for blockchain regulation in 2021 — Convexity CEO
The manifesto proposes a reassessment of the existing regulations by the Nigerian Securities and Exchange Commission concerning digital assets to create a more business-friendly environment. The new regulations aim to establish a framework for overseeing digital assets such as cryptocurrencies and other digital tokens in Nigeria.
In 2022, Nigeria set restrictions on the amount of cash that individuals and businesses could withdraw from banks and ATMs as part of an initiative to promote a “cashless Nigeria” policy and boost the utilization of its CBDC, the eNaira.
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