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SIBAN meets on Strengths, Weaknesses, Opportunities and Threats of Nigeria CBDC

Stakeholders in Blockchain Association of Nigeria (SIBAN) decided to be involved or make a day as regards the Central Bank Digital Currency (CBDC) on a topic “Central Bank Digital Currency: Strengths, Weaknesses, Opportunities and Threats.”

The program which had eminent speakers from around the country in the area of blockchain had in attendance as speakers, Chiagozie Iwu, the founder and CEO of Cryptosolution, Olumide Babalola, co-founder of Digital Rights Lawyers Initiative and Managing Partner, and Nathaniel Luz, who is the author of Digital in Cash.

It would be recalled that the Central Bank of Nigeria, earlier this month said she will be launching her digital currency by the end of the year 2021 and according to them, the research into a digital currency had been on for close to two years or thereabout. This action is the reason behind the forum, on Central Bank Digital Currency: Strengths, Weaknesses, Opportunities and Threats.

In his speech, Chiagozie said

the CBDC is not a coincidence, adding that most persons have been hearing about it. He therefore said the digital currency being talked about by the Central Bank of Nigeria has not really being open, as persons in the digital world have little or no information about the CBDC.

He maintained that one thing he is sure about is that the CBDC of the CBN is not going to be on blockchain but just a data base digital records as the case may be, adding that from the look of events, it is going to be like the normal kind of money transfer that we have been witnessing in the country.

Chigozie further said he is not seeing much benefits of a cashless policy since the CBDC is not on blockchain, maintaining that CBDC would have the economy more streamlined but it is still the fiat money.

Remarks as regards the fact that the CBDC will still be under the control of the Central Bank, Olumide Babalola said, digital currency is volatile, as it takes transaction from private to public, maintaining that there is no longer privacy and this has been the fear of the persons in the world.

He however said if the CBN is not considering laying the CBDC on blockchain then it is an issue. He added that with the CBDC on blockchain every transaction can be monitored or tracked and as such can reduce corruption and bring about data security and financial security.

However while speaking as regards the evolvement of currency stand, another participant by the name Nathaniel Luz said it is important to understand that all cryptocurrencies are digital money but said all digital money are not cryptocurrencies, maintaining that the Naira is already digital, therefore once you send money from one bank to another via phone is digital.

He however said this act, which is money being sent digitally is quite different from cryptocurrency, saying the CBDC is laughable.

Nathaniel further said, there can never be a real digital currency from centralised institutions. He maintained that the foundation of cryptocurrency is blockchain, proof of work, borderlessness, anonymity and permissionlessness, adding that any form of money that lacks any of this above five is not cryptocurrency.

He however said all what the CBN is doing is just a charade because there are principle backing it. He further said the principle backing cryptocurrency are binding, formidable and eternal.

At the end of the forum, the analysts said if the Central Bank wants to have a CBDC, it has to be devoid of a system built from the principles that are laid down in having a formidable cryptocurrency in the world.

 

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