For much of 2021, the Central Bank of Nigeria (CBN) has been in the headlines for its anti-cryptocurrency measures. The institution has this week increased its research and investment in crypto's underlying technology, Blockchain, and set a date for its pilot scheme of its blockchain-powered central banks digital currency (CBDC).
On October 1, CBN will reportedly launch a pilot scheme for "GIANT" - a CBDC project in development since 2017, which runs on the open-source blockchain Hyperledger Fabric.
Rakiya Mohamed, CBN's information technology chief, suggested that the bank may conduct a proof of concept before 2021. CBN representatives spoke out this week in a webinar with stakeholders. They stated that they cannot afford to fall behind as the vast majority worldwide continue their CBDC research and development.
CBN noted among the reasons for the project that a CBDC would benefit macro and growth management as well as cross-border trade support and financial inclusion.
CBN believes that there are still potential benefits to be realized, including improved efficiency in payments and remittances and better monetary policy transmission. It also facilitates targeted social policies.
The Bank of Ghana, along with CBN, has been rapidly moving towards the pilot stage of its own central bank digital currency. It has been a leader in CBDC development across Africa and believes that central bank-issued digital currency is better than and more risky than decentralized cryptocurrency.
However, Ghana's wariness of crypto is overshadowed by Nigeria's more aggressive measures, which include a ban on commercial banks and other financial institutions from servicing crypto exchanges. Despite this, Bitcoin adoption and BTC peer-to-peer trades have remained high in the country.