In the global adoption index of blockchain especially as it relates to cryptocurrencies, Nigerians have shown a strong affinity. The Central Bank of Nigeria (CBN), in line with developing tools and a foundation for the future of the nation’s financial roadmap, said that there are plans to explore stablecoins in the next three years.
In addition to developments around stablecoins, CBN added in the report that it will explore the development of ICOs and a new digital identity architecture built on the blockchain technology. Stablecoins are cryptocurrencies that are pegged either fiat, commodities such as gold or another cryptocurrency.
The CBN explained that native stablecoins will aid safer and more globally accepted financial transactions between two different currencies all on the blockchain. Although the CBN plans to explore the implementation of stablecoins, the report states that a regulatory framework needs to be developed for this implementation to be successful in Nigeria.
Development of a framework for ICOs in Nigeria
According to the CBN, a regulatory framework for workable stablecoins is in view as well as infrastructures around Initial Coin Offerings (ICOs). While there are fears about adopting ICOs because of numerous global theft cases, the bank asserted that there is a huge potential in ICOs as an asset class for fundraising in the business world.
“If implemented properly and supported with the right rules and regulations, ICOs could be turned into Financial Instruments and Investment Options, creating a new way to attract Foreign Direct Investment (FDI) and raise capital,” CBN said.
Digital identity on the blockchain
One of the current security and identity verification systems used by Nigeria is the Bank Verification Number (BVN). To further strengthen the system, the CBN plans to create a new BVN structure on the blockchain technology, “wherein the digital identity owners can hold the claim and will be able to securely share the identity”.
Taking clues from what various startups and whitepapers have written about blockchain identity, the apex bank said it is important “to reduce data redundancy and duplication of data”.
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