Although Nigerians seem to have accepted the digital currency of the Central Bank of Nigeria (CBN), skeptical analysts believe that a lack of trust in the government will ultimately limit the prospects for the success of the electronic naira.
The threat of fintech startups
In addition, some analysts insist that the already fragile position of digital currencies has become worse due to the need to compete with fintech startups.As before Report Author: Bitcoin.com News, Nigeria is home to some of the largest fintech startups and a country that has received a relatively large share of fintech investment from the African continent.
According to the Financial Times reportIt is this threat from well-funded fintech start-ups that raises questions about the opportunities of electronic naira to achieve certain CBN goals, such as bringing more people into the financial system or allowing a more targeted society And welfare expenditures.
Songhai Advisory analyst Adedayo Ademuwagun is one of the analysts cited in the report who expressed doubts about the prospects of e-naira’s success. According to Ademuwagun, most of the goals that CBN hopes to achieve through the digital version of Naira have already been achieved by private fintech startups. He explained:
The problem is that the use of existing financial payment systems can already fully solve all these problems. Nigeria is the fintech capital of Africa, so there are many options, many ways to pay someone, and the payment is already fast.
However, another analyst, Ronak Gadhia of EFG Hermes, believes that the government’s belief that all electronic naira transactions will be monitored may be sufficient to prevent some people from using electronic nairas.
“The government actually knows every transaction you make [with a digital currency] In places like Nigeria, there is some mistrust between ordinary Nigerians and the government and may be skeptical about adoption,” Gadhia was quoted in the report as explaining.
In addition, in support of his argument, Gadhia pointed out how the Nigerian government can simply stifle the End Sars protests freezing The bank account of the individual who organized the protest.
Although skeptical about the prospects of electronic naira, Gadhia insists that it is too early to judge or deny the potential of digital currencies.
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