eNaira introduction and adoption in Nigeria provides some lessons

Karthik Subramanian

eNaira, the CBDC that has been launched by the Nigerian government, has been generally welcomed by the people of the country if the data presented by the government is anything to go by.

It is reported that 400,000 new wallets have been created and over 12,500 transactions have been made within the network though it has only been a few weeks since the introduction of the system. But along with the good numbers comes the news that the system may be hampered by the lack of trust that the people seem to have in the government. It should be noted that this lack of trust has got nothing to do with crypto or with the way that people think about the technology but is purely due to the lack of trust among people as they believe that the use of the CBDC would make it easier for the government to track all the transactions of the people and then it would be very easy for it to shut down specific transactions or wallets or even the entire system as per their wish.

The cryptos and CBDCs are generally welcomed by people all around the world for their transparency and also because it can prove full freedom and independence and make the people finally in control of their finances with zero dependence on any intermediaries. But if the government is to act as the gatekeeper for the system and the CBDCs as a whole, then it defeats the purpose of decentralization and crypto as a whole. This is what seems to concern the people of Nigeria and it can be safely said that the same concern would be shared by the people in many countries around the world if and when their respective governments begin to push out the CBDCs in the respective regions.

This could turn out to be the edge that the private stablecoins are likely to have as they give full freedom to people to control their finances and the governance comes out of the community that is built around the stablecoins and it would be interesting to see when such a clash happens between the CBDCs and the stablecoins and how the respective governments would react it. Would they ban the stablecoins totally and force people to use CBDCs or would they continue to allow both of them to co-exist?

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