A digital security technology and financial expert, Dr Kingsley Chibuzor Aguoru, has expressed opposition to calls for the approval of cryptocurrency digital payment system due their potential to breach national financial regulations.
Aguoru, however, commended the Central Bank of Nigeria (CBN)’s decision to prioritise the eNaira over decentralised cryptocurrencies.
In a statement, the expert in the development of the 3WiDentity authentication system, pointed out that approving cryptocurrency for national use would contravene Nigeria’s existing financial regulations, as cryptocurrencies like Bitcoin operate as unregulated, decentralised assets.
He emphasised that the eNaira offers a safer and more reliable digital currency option for Nigerians.
Aguoru noted that unlike traditional currencies like eNaira, cryptocurrencies are not backed by any government authority, national regulation and standards, which introduces unique financial risks.
“The eNaira functions as a Central Bank Digital Currency (CBDC), which provides Nigerians with the benefits of digital payments while adhering to regulatory frameworks,” he said.
“Its value is pegged to the naira, making it a stable and secure means of transaction.”
Continuing, he said, “Cryptocurrencies, while innovative, exhibit high volatility and unpredictable value swings.
“For instance, Bitcoin and other decentralised currencies have demonstrated price fluctuations that limit their effectiveness as a reliable store of value.”
The UK chartered engineer and FEANI-certified European engineer also highlighted critical challenges in using cryptocurrencies as a standard currency, adding that effective currency must function as a store of value, a unit of account, and a medium of exchange.
“In order for a currency to fulfil these functions, it must have a stable value, consistent pricing metrics, and facilitate efficient transactions. Cryptocurrencies struggle to meet these standards,” he added.