TL;DR

  • Central Bank Adoption: The Central Bank of Nigeria referenced a 2020 Ripple Labs study, indicating 85% of payment leaders from 22 nations anticipate a CBDC launch in their countries within the next four years.
  • National Digital Currency Update: By 2022, 100 CBDCs were in progress, with Nigeria’s eNaira and the Bahamian sand dollar as notable launches. However, Nigerians have been slower to embrace the eNaira compared to global cryptocurrencies.
  • Crypto Popularity in Nigeria: Amidst inflation challenges, Nigeria’s young, tech-savvy population is driving rapid cryptocurrency adoption, propelling the nation to the second spot on Chainalysis’ 2023 Global Crypto Adoption Index.

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In a recent study on central bank digital currencies, the Central Bank of Nigeria cites Ripple Labs research to support its findings about CBDCs.

Ripple Labs Research Strengthens Case for CBDCs

The CBN cited a Ripple study from 2020 showing that some 85% of payment leaders at financial institutions in 22 countries expected their country to launch a CBDC in the next four years.

By 2022, there were 100 CBDCs in the research or development stage and two fully launched, “the eNaira in Nigeria, unveiled in October 2021, and the Bahamian sand dollar, which made its debut in October 2020.”

The Nigerian central bank’s report concludes:

Central bank digital currencies are gaining prominence as cheaper and faster alternative means of transactions with potential to improve the payments-settlement space, financial inclusion and monetary policy transmission.”

Since launching in October 2021, Nigerians have been slow to adopt the eNaira. That’s despite support for Nigerians to use the eNaira to pay electricity bills, television subscriptions, and airline tickets.

But Nigerians have been quick to adopt global, borderless, blue chip cryptocurrencies like Bitcoin, Ethereum, Binance Coin, and Ripple.

Nigeria Eagerly Adopts Cryptocurrencies

A Reuters report in September stated that “Nigeria’s young, tech-savvy population has eagerly adopted cryptocurrencies,” as the African nation grapples with soaring inflation due to weakness in its official currency.

That’s a use case cryptocurrency adopters in developed nations can also understand.

Furthermore, the West African nation ranks second on Chainalysis’ 2023 grassroots Global Crypto Adoption Index.

Meanwhile, Bitcoin price is soaring to all time high prices in Nigeria, as well as the United States and other inflation stricken nations.

Blockchain cryptocurrencies could be one key to unleashing Nigeria’s full economic potential. Nigeria is the largest economy in Africa today. As its population grows, Nigeria is on track to be the fifth largest economy on earth by 2075.

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