TL; DR Breakdown
- The first Africa Central Bank Digital Currency is not accomplishing its objective. Presently, it is not serving unbanked clientele. As a result, the e-naira app was shortly removed from the app store.
- The CBN is currently developing an app for the unbanked which will allow them to use e-naira.
The Central Bank of Nigeria (CBN) has been pushing for e-naira (CBDC) as an alternative currency to foster financial inclusion. But, some experts believe this initiative isn’t accomplishing its goals because it hasn’t yet much traction. So, it needs more time before fully taking off for people to start using it on their phones or online accounts.
The CBDC’s chaotic start
It appears that the CBN may have rushed to launch what is, in fact, Africa’s first Central Bank Digital Currency. This comes as a result of recent events which saw it remove its e-naira app from the Google Play Store.
The CBN is currently developing an app for the unbanked which will allow them to use e-naira. Yet, it’s unclear when this may be available. The CBN has thus far failed to give details to the Nigerian Blockchain sector about their ability and plan on creating a CBDC.
Cryptoassetbuyer explains that the CBN may not meet its goal of bringing financial services to the unbanked group.
The central bank has released a new app to transform the way people interact with their money. The first thing you need is an account. So what service does it offer if not your typical checking or savings accounts? The CBN-built platform will not be handy for those without banking access of any kind. After all, they target smartphone users who have financial management via downloads from various apps.
The Central Bank of Nigeria assured that its e-naira wallet would be available to non-smartphone users. But at the time, this service was still not live.
The CBN’s trust deficit
The e-Naira app could be a result of haphazard planning, according to Iwu. He concedes that this and other applications like them can have bugs. The issues might arise because the app was not well planned out in advance. With funds set aside from government departments, CBN’s input should’ve been better.
Experts suggest that a beta test could have prevented the CBN from releasing its faulty app. A report quotes Convexity’s Charles Okaformbah explaining how this disaster was avoidable.
In his opinion, Developers should have done a lot more tests on their application to see if it works as intended. If they had, some problems might have been identified and fixed before the release date.
It is a rare experience for economists to be able to get their insights on the ground. But, one such economist, Lloyd Onaghinon, feels that the CBN could have partnered with Nigerian blockchain players. The final product would have been better.
The report concludes that the CBN needs to fix its trust deficit. This will improve cryptoassets and blockchain technology adoption rates and Nigeria’s economy.
