Hundreds of thousands of Nigerians have opened a digital wallet to capture the first in Africa, but skeptics warn that widespread distrust of the government could hurt its adoption.
Since its launch on October 25, Inira, Africa’s most populous country, has become the last country to launch a digital currency, jumping from many other central banks around the world. France, China and Germany are all testing e-currencies. Six Caribbean countries are ahead of digital currencies.
As a sign of how fast the growth of official digital currencies is gathering momentum, the G7 Advanced Economy Group last month issued guidelines to ensure that its currencies “support and are safe” in the traditional financial and financial system.
According to Razor Khan, chief economist for Africa and the Middle East, Central Bank is responding to the “need to accept digital payment channels” following the outbreak. Process, and uncontrolled digital currency options are highly sought after.
The Central Bank of Nigeria (CBN) said the first week and a half – when nearly 400,000 new wallets were registered in dozens of countries and customers made 12,500 transactions worth 46.3m naira ($ 113,000) – was an “amazing success.” This was despite the fact that customers complained about the difficult registration process.
Analysts say the digital but non-cryptographic Naira version of the blockchain technology will serve the central bank’s purpose, reducing transaction costs, increasing cross-border flows and allowing more people to spend on financial systems and more social and security costs.
“The issue is whether all of this can be adequately resolved through the use of the current financial system,” said Adedayo Ademuwagun, a analyst at Songhai Consultant. “Nigeria is the capital of Fintech in Africa, so there are only so many options, there are ways to pay for one person and pay quickly.”
At last month’s inauguration, Nigerian President Muhammadu Buhari said Nigeria’s gross domestic product – $ 432 billion last year – could grow by $ 29 billion over the next 10 years.
EFG-Hermes, an investment banking firm focused on emerging markets, says low-cost transactions make Iniraran “very profitable and disruptive. . . But there is uncertainty about how widely it will be used. great Half of Nigerians Lack of regular bank accounts, the informal economy accounts for more than half of GDP, and 95 percent of transactions are still made in cash.
“The government is well aware of every transaction you make [with a digital currency] And where there is little trust between ordinary Nigerians like the government and the government, there may be doubts about adoption, ”he said.
He described how the Central Bank had suspended those involved in last year’s #EndSARS anti-police protests. “If the government wants to close a person’s account, it will make it easier. . . Or even the whole system. ”
Nine months after the launch of Inira, it effectively banned the use of cryptocurrencies, including bitcoin, to support # EndSARS opponents. Nigeria has quickly become one of the leading cryptocurrencies in Africa, with citizens using capital control to generate income from widespread unemployment and to protect the permanently declining naira.
In recent years, the decision to effectively block cryptocurrencies has been widely criticized in the Lagos Fintech, which has attracted billions of dollars in venture capital.
“Asinara is losing sight of what it means to solve,” said Victor Asimota, a Nigerian technology investor, echoing the sentiments of others. Post it on Twitter last week. He argued that some Nigerian Fintech companies would facilitate payments and reduce transaction costs.
Gadia agrees, but warns that it is too early to reduce the capacity of Inira. “It seems low on the scale of what Nigeria is offering, but I am not saying it is completely disappointing or surprising.” “It seems moderate at this stage, but I still think it’s just the early days.”