Head of Payments Technology and Infrastructure for SystemSpecs, Mujib Ishola, has joined other technologists to root for the introduction of digital naira.
This is amid the growing adoption of cryptocurrencies across the globe, which the Central Bank of Nigeria seems not to buy into.
The Nigerian technology expert said that ‘digital naira’ could be introduced some time soon, adding that state-issued stablecoins would be prevalent in the future and could eventually replace fiat counterparts.
In a statement made available to Financial Street on Thursday entitled ‘Cryptocurrencies: Stablecoins could bridge gap between regulators and players’, Ishola said stablecoins had been proposed to bridge the gap between traditional currencies and cryptocurrencies.
At the Techpoint Digital Currency Summit tagged ‘Building the money of the future’ in Lagos recently, Ishola had lent his voice on the restriction imposed on cryptocurrency trading by CBN.
He also noted that while cryptocurrencies were getting popular, they were mostly issued by unregulated and unlicensed entities, and as such not legal tender.
This might have informed the decision of the CBN to prohibit cryptocurrency transactions in the country’s banking sector, he added.
According to him, the major advantage of a stablecoin is that it combines the strong points of cryptocurrencies such as transparency, privacy, faster transactions and low fees with the guarantees of trust and stability of fiat currencies.
Meanwhile, the use of stablecoins globally continues to grow alongside the adoption of cryptocurrencies such as Bitcoin and Ethereum, Ishola noted.
He explained that some of the trends driving the growth of stablecoins include fewer regulatory issues, stability of fiat currencies, ability to trade unstable crypto for stable coins at lower risks, need to power everyday transactions and quicker movement of funds between crypto exchanges and fiat currencies.
“In 2020, transaction volume grew by a whopping 316 per cent, from $248bn to more than $1tn,” he added.