If you botch the roll out of your country’s Central Bank Digital Currency (and have Presidential ambitions), you might get arrested. Just ask the Governor of Nigeria’s Central Bank who was suspended from office by the newly elected President and picked up by the Secret Police, says Sanjeev Aaron Williams
It wasn’t the first time the Police wanted the Governor for allegations including ❝economic crimes of a national security dimension.❞ Specifically his all-out war on cash by "demonetising" high denomination bank notes (effectively banning their use), failing to replace them with new notes as promised, limiting daily cash withdrawals and triggering a cash crunch caused mayhem. All in the name of the IMF-approved CBDC, the e-Naira.
Inflation soared where 63% are poor and 33% out of work. The lack of trust in the Central Bank was matched by shunning the e-Naira since most Nigerians don’t have a smart phone or web access. More than 50% are unbanked.
❝...the overwhelming majority of Nigerians had no…means of using digital payment methods even if they had wanted to. As more than half of the cash was drained from the economy, they had no means of transacting. Many of them took to the streets to protest. Banks were vandalised; some were even burnt to the ground. At the height of the protests,...…civil society groups demanded that the CBN issue the new notes and end the suffering of millions of Nigerians — a demand that was rejected by the central bank…❞
Even though a cashless policy and the e-Naira predated the demonetisation of cash by about a year, the Governor didn’t help his case by declaring ❝The destination, as far as I am concerned, is to achieve a 100 percent cashless economy in Nigeria❞.
Cash is still king in Nigeria and the e-Naira’s adoption rate is very low. But the IMF isn’t giving up. It’s focusing on the unbanked with mobile phones and those without web access by offering the e-Naira via social cash transfer programs. In other words, welfare payments.
1.Nigeria’s population is 220 million. 25-40 million have a smart phone. Over 50% are unbanked. Forcing the adoption of a CBDC in a cash dominant society was going to be a hard sell.
2. IMF sustained a setback. They were not expecting a civil society backlash against what little economic freedoms they had. Watch IMF’s next move in Nigeria.
3.By contrast, Kenya, a pioneer in mobile money and East Africa’s largest economy said in June 2023 after a public consultation, that the allure of CBDCs is fading and that implementing a CBDC in Kenya ❝may not be a compelling priority in the short to medium term.❞
4. Here in Hong Kong, work on e-HKD is underway. I speculate this will be the city where e-HKD and e-Yuan will operate concurrently and interchangeably. So far, the Hong Kong and Chinese governments have said they will not abolish cash.
5. IMF is a US proxy. Neither Hong Kong nor China think much of it.
Sanjeev Aaron Williams is a solicitor in Hong Kong. He is a Commercial Dispute Resolution Solicitor from international and Hong Kong firms, qualified in FinTech, Crypto and Blockchain and handles Digital Asset Litigation.
Original source, republished with permission: The Naked Capitalism blog.
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