Developed countries and indeed their developing counterparts have since begun to tow the path of digital currency and Nigeria would noy be left behind in the economic revolution which recently caught the attention of the Central Bank of Nigeria (CBN).
Crypto currency is a digital asset from block chain technology designed to work as a medium of exchange using cryptography to secure transactions and to control the creation of additional units of the currency. Crypto currencies are a subset of alternative currencies or specifically digital currencies.
Following the economic revolution and the quest to sustain the economy through advanced financial technology, a new form of digital currency in which encryption techniques are used to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank, needed to be introduced into the economy. As it is today, Automated Teller Machines (ATM) for crypto currencies have been launched in Canada, UK, Germany, South Korea, Brazil, India etc with the sole aim of aiding banking technology.
A former Deputy Director of the CBN and senior lecturer with the Department of Economics, University of Lagos, Dr Emmanuel Balogun explained that e-payments have come to replace the traditional fiat money.
“In the first instance, digital currency or e-money is part of e-payment system and e-payment is not symbolic. It is not like there is a coin that would serve as a medium of exchange. What it means is that a payment system that is gradually going to replace fiat money through technological advancement such that buying is no longer going to be based on hard currencies is used for payment for goods and services. It also implies that the demand for fiat money for payment system would be significantly reduced.
“In a country like ours which is fully reliant on hard currencies, the e-payment money would be of a significant advantage to the CBN. It is not that CBN is just going into it, it is already a policy. The technology is based on what we call Real Time Gross Settlement (RTGS). This time around, you have direct access to your account irrespective of your bank and where it is located and that is why you can draw from your ATM card anytime and anywhere in the world. That’s what we are talking about,” Balogun said.
Pursuant to seeking a similar technological development for the country’s banking system, the CBN with its means of exchange including bank draft, promissory notes, cheques, values, treasury bills, bonds, may soon add digital currency to the existing fiat money having tabled it for consideration.
In a recent workshop for financial correspondents held in Kaduna, the Managing Director of Nigeria Deposit Insurance Corporation (NDIC), Alhaji Umaru Ibrahim, reportedly disclosed that the NDIC, under his watch, and in consonance with the CBN, has set up a committee to look into the trending crypto currency.
The NDIC boss said: “On our part, we have constituted a committee together with the Central Bank to have an in depth study of this phenomenal bitcoin (one of the crypto currencies).
“We will look at its advantages and disadvantages, what it means for the payment system and what it means for safety and security of customers. We will also look at what it means for money laundering, anti corruption crusade, crime and measurement of money for the economy.
“But we need to do a lot of education to do this and I am calling on you (media) to educate yourselves about all of this so you can educate the public.”
Ibrahim was also quoted to have added that a lot of Nigerians had already started patronising digital currencies. “It has started to creep in and nobody can stop it in different economies of the world. Some central banks have adopted it and are seriously doing everything possible to bring in these invisible products. The owners do not need any central bank; they do not need any physical bank.
“If you are a subscriber, you only know yourselves and they give you a bit of the bitcoin and in some countries, you can convert it to cash.You can make payments with it because it has been recognised and one of the famous ex-chief executives of Barclays PLC, Antony Jenkins, have joined the group’s board of directors,” he noted.
Among the crypto currencies that exist today, the bitcoin is adjudged the pacesetter. For the crypto currencies, coins are talked about and another lexicon that comes to play is mining. Mining is a way of getting these coins and putting them up for sale all digitally.
The Billion Coin (TBC) is another crypto currency launched in March last year. Reportedly, its opening price was 0.001 and has gone up in value by five per cent ever since that day. Traders on TBC enjoy a wide range of interest rates accruing to their investments on a daily basis, as the price of TBC appreciates. As targeted, the price of a coin soon hits a billion dollars.
Trading on TBC, Bitcoin, SwissCoin, EdinarCoin and other digital currencies, happens peer to peer, until the target of getting millions and billions of investors is hit.
TBC is now in Kringles. Kringles are the smallest change of TBC such that 0.0000001 TBC equals one Kringle. Hence, the equivalent of one TBC is 1,000,000 Kringles.
According to one of the major investors in crypto currency in the country, Prisca Agwu, digital currency in the country is here to put an end to poverty, while boosting the different sectors of the economy.
“Digital currency in Nigeria is the change we have been clamouring for. It will not only end poverty, it will also end the frustrations encountered in financial transactions in Nigeria. There’s no weekend, no public holiday and no transfer limits . This will also boost the communication industry too,” Agwu said.