Over the past decade, blockchain technology has invented new systems of working, new systems of paying and consequently carrying out finance activities. It has invented new systems of programming and even new systems of entertainment, a good use case being in the gaming industry. One of the best ways to explain blockchain technology is that it is simply a public ledger or registry without any central place of data storage. The primary use case of any blockchain is to maintain the integrity of data hence its immutability, security and accessibility of the data by those on the blockchain network.

This technology has made it possible for digital currencies, assets and commodities to exist in a single entity as crypto currencies.

But that’s not all to do with blockchain technology, for mass adoption of the technology in the solving of finance payments some functions are required, both in technology and business use.

Technology Aspect

The blockchain has to be;

  1. Secure – hack proof
  2. Decentralized – Power to the users 
  3. Scalable – Ability to take on more users without increasing fees or having slow execution in transactions
Business Aspect
  1. Transactions on the blockchain network should be cheap and fast
  2. The cost of building solutions on the blockchain network should be affordable
  3. The programming interface for building on the network should be familiar with programmers and already existing languages.

All of these qualities are present in the Algorand blockchain, Algorand blockchain has solved the Blockchain trilemma problem, making it;

  1. Fully secure
  2. Fully decentralised, immutable and irreversibility of transactions
  3. And fully scalable

Algorand’s Stateless TEAL Smart Contract makes it possible for thousands of transactions to execute in 1 second on the Blockchain.

Why Nigerians Should Have a Central Bank Digital Currency (CBDC)

The Nigerian economic system is entering a “steady repeated” recession, the NGN now trades $503 to a dollar. In fact I did a transaction this morning to credit my dollar account so I could pay for a service and I was charged N500 to a dollar.

People are already devising ways to begin to save in Dollar using the Dollar Cost Average system against the Naira, this is not a good thing for the Central Bank because they might be looking at a situation where they lose monetary control and are left with the options of restricting spending limits and other inconvenient monetary policies on the people.

“The big players have gone digital and are dumping on our fiat”

The traditional way of depositing fiat to get USD in our centralized finance is having an adverse effect on our currency since it can just be printed in unlimited amounts by our Central Bank and  serves as the only alternative for making international transactions.

What if our NGN Stable coin can be accepted internationally because international merchants can easily convert it to any crypto of their choice wherever they are and still keep the value of their money in the currency they’ve chosen to convert to.

  • Reduced cost of managing the NGN Fiat

The cost of managing our Naira in printing, issuing and circulation is quite high, it’s like “paying yourself in the finished product of your raw material”, what if we split the currency issuance in 50%, we have a steady amount of NGN in circulation in Fiat and also in the NGN stable coin.

  • Ease of international transactions

Imagine you need to send money to your family in Nigeria, or you need to pay tuition fees for your school in the US. Imagine doing that with a click of a button and acceptance of receipt without having to pay exorbitant fees.

If you’ve ever tried to buy or import goods, you’ll understand the hassles and protocols you have to go through with the bank in processing your transactions in your country with your client’s bank overseas. It’s time consuming and heavily expensive. Having the NGN stable coin built on the Algorand blockchain would ensure that weeks of transactions execute in a second.

If payments are made between parties on the Algorand Blockchain, those transactions are irreversible. These kinds of transactions can be built using a trustless smart contract system to ensure execution.

This will also make it easy for families overseas to send monies to their loved ones without having to pay exorbitant fees.

I’ve explained this in detail in my recent article where I talked about decentralized commerce and how NGN having a stable coin can make that possible on the Algorand Blockchain.

  • Banking the unbanked

To save NGN in Nigeria and carry out transactions, one has to have a bank account. But There are people who will be able to save, transfer and trade NGN without having to go to the bank, just like we do with USDC and more.

  • Increase in trade activities in the International Financial Market

Crypto newbies and oldies alike will be able to trade the Naira against other crypto assets which would increase the demand for Naira against the dollar and consequently increase the value of the NGN.

There are some challenges to having a CBDC but those can be curbed with the aids of the bank, and proper economic regulations. Challenges such as:

  • Tax evasion, political corruption in laundering and more
  • Near irrelevance of commercial banks to carrying out local transactions apart from issuing fiat. Because everyone is making their own transactions, Banks might begin to charge on deposits of fiats to make up for reduced patronage.
Is Nigeria Ready?

Nigeria is ready to adopt a change in her financial system, a recent publication by Bitcoinike reporting a survey done to ascertain Nigerians view on digital currencies show these and lots more;

  • Nearly 3 out of 5 Nigerians (59%) are ready to adopt a global digital currency, reflecting the country’s growing interest in cryptocurrencies since the start of the global pandemic.
  • Nigerians also rank higher than the global average of 37 percent for openness to digital currency adoption.
  • 44% of Nigerians believe the Naira will decrease in value over the next 12 months – double the number from 23% in 2019


Remmitano published an article showing countries that are already researching and using their CBDC

Marshall Islands built their CBDC on the Algorand Blockchain, and recently, the Chinese Blockchain-based Service Network has partnered with Algorand to start developing digital assets financial products for China. 


The Covid-19 situation in the world’s global economic space today has made countries re-think using Digital Asset as an advantage to their liquidity and economic growth, they’re thinking of creating their own CBDC.

Nations of the world are seeking and inquiring on the advantages of moving to a Central Bank Digital Currency on a BlockChain or a hybrid of both blockchain and traditional execution of economic activities.

We might be well aware that China is working on their first Central Bank Digital Currency, and it is safe to predict that most countries will follow suit, and as they do, the Algorand Blockchain will be suitable to meet their CBDC powering needs; one reason is: Algorand’s transaction finality makes it suitable, efficient and effective for stable coins to be built on it.

Nations are seeking to be in the forefront of financial innovation so they can establish and better govern a more flexible monetary policy system in their economy. Banks are investigating and competing to produce FinTech products, there’s one in Nigeria seeking to do such.

If private finance institutions are already working on this, then I think it’s high time the Central Bank of Nigeria considered this.

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Author Profile: Karla Obakpolor is an Algorand Ambassador and can be followed on Twitter. Karla is a member of SiBAN.


Disclaimer: The opinion expressed by the author is his or her personal opinion and does not represent the position of SiBAN or any of its executives or representatives.

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