By Martin Ekpeke
Nigerian experts during a live conversation on X (formerly Twitter) hosted by the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN) have debated the future of digital currencies with special focus on the pros and cons of Central Bank Digital Currencies (CBDCs) and stablecoins.
During the conversation, moderated by Prosper Ayere, a web3 community builder, the experts weighed in on the opportunities and risks of Central Bank Digital Currencies (CBDCs) and stablecoins in Africa, highlighting the potential for digital currencies to transform finance in Africa, but also brought attention to significant challenges, particularly the need for trust and practical implementation.
In her opening remarks, Prosper stated that the conversation was organized to help shape the future of digital currency in Africa. The event, anchored by a community passionate about blockchain, fintech, and digital assets, aimed to forge a path for this future.
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She said the conversation, titled “Central Bank Digital Currencies and Stablecoins: Opportunities and Risks in Africa’s Digital Currency Future,” would “explore the challenges and innovations shaping Africa’s digital economy.”
For Oluwaseun Dania, CEO of Crello Limited, the potential of a well-regulated naira-backed stablecoin to boost local currencies would allow Nigerians to trade directly with other countries that have their own digital currencies, eliminating the need to first convert to U.S. dollars.
“If we have stablecoins, we have an exchange, we have a platform where people can actually exchange directly. It will definitely increase the dependence on the local currencies,” Dania said.
He also noted that a digital currency could incentivize holding naira, as platforms could offer interest yields that are more competitive than those from traditional commercial banks. This could help reduce the “dollarization” of economies and encourage local currency use for daily transactions and cross-border trade.
Also, Harri Obi, Co-Lead of SuperteamNG, warned that a lack of trust and over-regulation are major obstacles. He pointed out the failed adoption of Nigeria’s eNaira, which he attributes to the government’s initial failure to engage with digital asset stakeholders.
“The government is taking a lot of wrong steps… When they found out that, okay, this thing wasn’t scaling and wasn’t growing, was when they decided to come and have a conversation with the digital asset stakeholders. By then, it was late, right?” he stated.
Obi emphasized that African fintechs and innovators must focus on building products that people actually want to use, particularly for crucial services like cross-border transfers. He stressed the importance of moving beyond online-only marketing to engage with merchants and agents on the ground. He also highlighted the need for simple onboarding processes, suggesting innovators meet users “where they are” on platforms like WhatsApp and USSD, which are popular and widely accessible.
Meanwhile, Cornelius Oroke, CEO of Paxpay, emphasized the potential of well-implemented CBDCs to revolutionize cross-border remittances and promote financial inclusion, particularly for individuals in rural areas. He argued that a functional CBDC would be much faster and cheaper than traditional bank transfers, which are often slow and burdened with high fees.
“If it works like what it is supposed to be, it is going to be very fast and it will cost less,” Cornelius said.
He also noted that a CBDC could strengthen the naira by reducing reliance on the U.S. dollar for international transactions. Furthermore, he explained that a digital currency could bring banking services to those without internet access, as it would enable offline transactions via USSD and SMS. He believes this would reduce reliance on the black market and increase the volume of formal remittances.