The Central Bank of Nigeria has confirmed that it will start the pilot of its central bank digital currency (CBDC) that is designed to run on the Hyperledger Fabric blockchain on October 1, 2021.
For most of this year, the Central Bank of Nigeria (CBN) has been hitting the headlines for its anti-crypto measures. Yet, the institution has this week redoubled its investment and research funding into crypto’s underlying technology, blockchain. Additionally, it has now set a clear date for the pilot test scheme of its blockchain-powered central bank digital currency.
On October 1, the bank will reportedly launch a pilot scheme for “GIANT”, its CBDC project that has been in development since 2017. Since the project runs on the open-source blockchain Hyperledger Fabric, the government believes that it will cater to the needs of crypto investors who are shifting their money from the old stock markets into the nascent space.
CBN’s information technology director, Rakiya Mohammed, explained that the bank may do a proof-of-concept before the end of this year. In a webinar earlier this week with the stakeholders, CBN representatives allegedly insisted that the institution might not afford to be left behind while most of the central banks throughout the world make headway with their in-house CBDC research and development programs.
Among the motivations that were cited for the project, CBN has said that a CBDC would be highly beneficial for macro and growth management, cross-border and international trade support, and financial inclusion.
Possible benefits may still extend some more, in CBN’s view ranging from higher efficiency for remittances and payments improved tax revenue collection, better monetary policy transmission, and the facilitation of targeted social policies.
Apart from CBN, the Bank of Ghana has also been moving rapidly this summer towards the pilot stage for its own central bank digital currency. The country has now positioned itself as a pioneer in CBDC development on the continent. It also considers central bank-issued digital currencies to be quite superior to and less risky than decentralized cryptocurrencies.
Nonetheless, Ghana’s wariness of crypto is overshadowed by Nigeria’s highly aggressive measures that include a ban on commercial banks and all other mainstream financial institutions from servicing crypto exchanges. Despite all that, Bitcoin adoption and BTC peer-to-peer trades seem to have remained high in the country.