Nigeria is the sixth country in the world, and the first in Africa, to launch its cryptocurrency. Will eNaira compete with Bitcoin on the continent?
The President of Nigeria, Muhammadu Buhari, has just unveiled the cryptocurrency launched by the financial authorities of his country. The eNaira is an electronic money spread over the national currency, but whose functioning goes beyond that of a simple duplication.
Since April, the Central Bank of Nigeria (CBN) had banned electronic currency accounts for individuals, halting the expansion of shadow finance in the country. This had meant the official end of the most popular cryptocurrencies - Bitcoin or Ethereum - for the 207 million inhabitants. This decision then provoked an outcry in the media and among Nigerian youth. Nigeria is the second largest country in Africa in terms of electronic currency flow, and cryptocurrencies had become common in the business world.
In order to meet the aspirations of Nigerian youth, the CBN announced the development of eNaira last June. Scheduled to be launched in 2022, the cryptocurrency finally entered the test phase at the end of July. The eNaira will therefore be accessible to the general public from today, and in the global trading community, all eyes are on Nigeria. Indeed, the eNaira already leaves with more than 30 million potential users, and the juicy Nigerian e-commerce market is only accessible with this cryptocurrency.
Specialists expect technical issues when launching eNaira. The next few days will, in fact, serve as a full-scale test for the CBN data centers. The launch of eNaira will also be essential for the three key players in its development.
First of all, the stakes for President Muhammadu Buhari are high : The Nigerian President has taken full force of the criticisms of his stance towards the ICT giants. First because of the suspension of cryptocurrencies, then with the launch of Amazon Web Services (AWS) - which monopolizes the cloud of Nigerian state institutions -, and finally after his dispute with Twitter, which was suspended for more than three months in Nigeria. Buhari therefore has no other choice but the success of his eNaira to reduce the pressure on his government, already highly criticized by the international press and the Nigerian opposition.
This launch is also a challenge for, CBN Financial IT Security Queen Rakiya Mohammed, which is the face of eNaira, which was originally intended to be a project to digitize the physical currency, the naira, and which has been changed to state fiat currency (CBDC). This means that eNaira's flow control, security and accessibility will be handled by the CBN's CTO. Rakiya Mohammed has indeed become a leading public figure for several months. If the cryptocurrency is successful, the young woman could seek a political career.
But it is especially towards the coding of the eNaira that all eyes are turned. Certainly, the security of the CBN's servers seems to be assured. But for a CBDC, the main thing is that the currency, its applications and its accesses are impenetrable. And cybersecurity will be ensured by an American fintech, Bitt Inc, run by American businessman Brian Popelka.
A name unknown in Africa. However, Popelka is a miracle worker in the United States. He joined the Overstock team in 2002 and saved the e-commerce platform from a demise that was thought to be inevitable. In 2016, Overstock became eBay's number one competitor, selling old music, video game and old abandoned software licenses (abandonware). Popelka founded Bitt Inc in 2017 and settled on the island of Barbados, where her closeness to Governor and possible future President, Sandra Mason, allowed her to manage the country's finances. Thus, Popelka deployed the first product of Bitt Inc, mMoney, in the banks of the island, a particularly secure financial paradise.
A future success of eNaira would therefore mean, for Popelka, a gateway to Africa. It should be remembered that in other countries, such as Kenya or South Africa, the ground is more than favorable for electronic commerce and finance.