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Nigerians’ Rejection of Their CBDC Is a Cautionary Tale for Other Countries


In Nigeria, citizens have taken to the streets to protest the nation’s cash shortage, further objecting to their government’s implementation of a central bank digital currency (CBDC). The shortage came about due to cash restrictions aimed at pushing the country into a 100% cashless economy. Yet, instead of adopting the CBDC, Nigerian protesters are demanding paper money be restored.

The country’s experience strongly suggests the average citizen understands that CBDCs present a substantial risk to financial freedom while providing no unique benefit.

Nicholas Anthony is a policy analyst in the Cato Institute’s Center for Monetary and Financial Alternatives.

It is no secret that CBDCs have been growing in popularity among central bankers, policy makers, and consultancy firms in recent years. Yet, for citizens it’s been another story. When the U.S. Federal Reserve solicited comments on CBDCs, more than two-thirds of the commenters were concerned about the risks to financial privacy, financial freedom and the stability of the banking system.

Further, CBDCs really don’t add anything novel to the market in terms of benefits for consumers. To the extent people want it, many currencies are available in digital forms through debit cards, payment apps and even prepaid cards. That much should be clear from the abysmal adoption rate in Nigeria, where less than 0.5 % of Nigerians have used the CBDC. To put that number into perspective, more than 50% of Nigerians have used cryptocurrency.

CBDC adoption incentives in Nigeria have failed

The Nigerian government has unleashed a flurry of tricks to spur adoption but none has proven effective. To its credit, the Nigerian government initially tried to encourage use through modest measures. In August 2022, it removed access restrictions so that bank accounts were no longer required to use the CBDC. Then, in October, it offered discounts if people used the CBDC to pay for cabs.

Yet, neither effort proved to be fruitful. Put simply, Nigerians prefer cash.

Read more: Why Nigerians Aren’t Turning to the eNaira Despite Crippling Cash Shortages

Unfortunately, the Nigerian government doubled down and moved to more drastic measures by restricting cash itself. In December the Central Bank of Nigeria began restricting cash withdrawals to 100,000 naira (US$225) per week for individuals and 500,000 naira ($1,123) for businesses.

To make matters worse, the Nigerian government also chose to redesign the currency during this time in a “move aimed at restoring the control of the Central Bank of Nigeria (CBN) over currency in circulation” and to “further deepen the push to [a] cashless economy,” according to a CBN press release.

So not only are citizens limited in how much they may withdraw, but the commercial banks also don’t have the cash to give out because many are still waiting for the newly designed cash to arrive.

With these restrictions in place, the Nigerian government managed to drain the economy of cash and set the stage for the CBDC to finally have its moment in the spotlight.

‘You can’t legislate a change in behavior’

And yet, it didn’t work. Stories of Nigerians struggling with the cash restrictions quickly spread across Twitter posts, TikTok videos and other social media. Rather than turn to the CBDC, Nigerians took to the streets to protest the restrictions and cash shortage.

The new notes will, it is hoped, arrive soon, but even then Nigerians are unlikely to find relief. Central bank Governor Godwin Emefiele said, “The destination, as far as I am concerned, is to achieve a 100% cashless economy in Nigeria.”

The company that designed the Nigerian CBDC called the cash restrictions a creative use of marketing and said other countries could be expected to take similar steps. Yet, Nigeria should serve as a cautionary tale for other countries looking to launch CBDCs.

Ayokunle Olumbunmi, head of financial institutions ratings at Agusto and Co. in Nigeria, put it well when he said that the central bank “doesn’t want us to be spending cash. They want us to be doing transactions electronically, but you can’t legislate a change in behavior.”

CBDCs may be popular among central bankers, but money is ultimately a tool for the people. So long as the risks outweigh the benefits, it’s unlikely any CBDC will gain traction in Africa or elsewhere.https://jac.yahoosandbox.com/1.5.0/safeframe.htmlhttps://s.yimg.com/rq/darla/4-10-1/html/r-sf.html

US bans entry to Syria security agent over killings on video

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FILE - This frame grab from a 2013 video, shows a Syrian soldier firing into a large pit full of bodies, in the Tadamon neighborhood of Damascus, Syria. The U.S. State Department issued an entry ban into the United State Monday against a Syrian intelligence member who appeared in a video leaked last year showing him shooting people dead during the country's 12-year conflict. (AP Photo, File)
FILE - This frame grab from a 2013 video shows a blindfolded Syrian man pushed by a Syrian agent before he was shot dead and thrown into a large pit full of bodies in the Tadamon neighborhood of Damascus, Syria. The U.S. State Department on Monday banned entry into the U.S. of a Syrian intelligence member who appeared in a video leaked last year showing him fatally shooting people during the country's 12-year conflict. (AP Photo, File)

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Syria US

FILE – This frame grab from a 2013 video, shows a Syrian soldier firing into a large pit full of bodies, in the Tadamon neighborhood of Damascus, Syria. The U.S. State Department issued an entry ban into the United State Monday against a Syrian intelligence member who appeared in a video leaked last year showing him shooting people dead during the country’s 12-year conflict. (AP Photo, File)ASSOCIATED PRESSMon, March 6, 2023 at 4:59 PM GMT+1

BEIRUT (AP) — The U.S. State Department on Monday banned entry into the U.S. of a Syrian intelligence member who appeared in a video leaked last year showing him fatally shooting people during the country’s 12-year conflict.

The ban against Amjad Yousef, a member of Syria’s notorious Military Intelligence Branch 227, includes his wife and immediate members of his family, the State Department said in a statement.

Yousef was one of several Syrian security agents who appeared in the video in which dozens of blindfolded, bound men were shot and thrown into a trench.

The decision came a week before Syria’s conflict enters its 13th year. The war has killed nearly half a million people and left large parts of the country destroyed.

“As a result of today’s action, Yousef, as well as his wife, Anan Wasouf, and their immediate family members, are ineligible for entry into the United States,” the State Department said.

The 6-minute-43-second video clip stamped with the date April 16, 2013, shows intelligence members with a line of around 40 prisoners in an abandoned building in Tadamon, a suburb of Damascus near the Palestinian refugee camp of Yarmouk. For much of the war, the district was a front line between government forces and opposition fighters.

The prisoners are blindfolded, with their arms tied behind their backs. One after another, the Branch 227 gunmen stand them at the edge of a trench outside the building filled with old tires, then push or kick the men in, shooting them as they fall.

In a cruel game, the agents tell some of the prisoners that they are going to pass through a sniper’s alley and that they should run. The men tumble onto the bodies of those who went before them. As bodies pile up in the trench, some still move, and the gunmen shoot into the pile.

Then the gunmen set the bodies on fire, presumably to erase evidence of the massacre.

The State Department said Yousef, a warrant officer in the Syrian security services, was involved in “gross violations of human rights” for his involvement in the killing of 41 unarmed civilians.\

Credit: Daily Aun

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