If the latest fillers are through, then Nigeria might be joining the digital currency community but in a different way.
Japanese and Nigeria’s Central Bank are said to be looking at collaborating to development of digital currencies that will be legally accepted as a means of payment across both countries.
This is the first time Nigeria’s government will be showing key interest in cryptocurrencies given its earlier stance that all banks in Nigeria will be sanctioned should they process or get involved in any Bitcoin, OneCoin and any other digital currencies for that matter.
Japan had in contrast to Nigeria accepted Bitcoin as a means of payment ion its financial markets. The government is also looking at developing its alternative digital currency that will be politically sanction called the J-Coin developed by the Mizuho Financial Group and Japan Post Bank.
There is no timeline as to when the digital currency for Nigeria will be launched but there are indications that an initial coin offering, ICO might be possible in the next 12 months.
Should Nigeria go ahead with the plan there are far-reaching consequences for the local and regional financial services sector. An introduction of a digital currency would further disrupt their business model as many banks rely on transaction costs to boost their revenues which digital currency tend to lower.
However, Adegbenro Bello, a financial analyst with a tier two bank in Nigeria said banks will not lose out because they easily adapt and because of the huge customer base they have they will be able to tweak their business models to suit the change.
Security and governance have been one of the major banes of digital currencies, Adegbenro thinks banks will be better manage the situation:
“Banks can better handle the governance issue that has been the bane of cryptocurrency so far”.
Nigeria is Africa’s largest economy but with smaller financial markets compared to South Africa, the third largest economy in the continent that has allowed the use of digital currencies but with strict regulations.