Kiffmeister’s #Fintech Daily Digest (20220607)

Uganda Seeks CBDC Lessons from Nigeria

A delegation from Bank of Uganda (BOU) went on an “experience sharing tour” of the Central Bank of Nigeria (CBN) central bank digital currency (CBDC) e-Naira project. The BoU announced its intention to explore CBDC earlier in 2022, with key questions revolving around the rationale, for example “what issues it is going to help resolve.” [Read more]

However, the digital divide threatens eNaira’s mass adoption

According to a recent Ventures Africa poll only 4% of Nigerian respondents have used the eNaira, and 64% haven’t even heard of it. Retail merchants and traders felt the same way. Plus only 30% of merchants and traders interviewed had heard of the eNaira, and none had used it. One of the factors contributing to this may be Nigeria’s digital divide. According to the Alliance for Affordable Internet only 12% of Nigerians have access to 4G-like Internet speeds or the capacity to use the internet on a daily basis. Although the CBN has said that Nigerians without smartphone internet access will be able to transact in eNaira using basic featurephones, apps have been the predominant form of transaction. [Read more]

Blockchain scalability and the fragmentation of crypto

A new Bank for International Settlements (BIS) paper contends that the use of public blockchains results in fragmentation that means crypto could never be a suitable means of payment. As transactions per block get close to their limit, the cost of transactions rises, causing users to seek alternative blockchains, and this fragmentation means blockchains cannot harness the beneficial network effects associated with traditional money. [Read more]

Cecilia Skingsley appointed as Head of the BIS Innovation Hub

Cecilia Skingsley, First Deputy Governor of Sveriges Riksbank, has been appointed to head the BIS Innovation Hub. The Hub serves as a platform for central bank collaboration in building technological solutions to problems in the financial sector. Five Hub Centers are already operating in Hong Kong, London, Singapore, Stockholm and Switzerland. Two more, in Frankfurt/Paris and Toronto, are expected to open later this year. The Innovation Hub also has in place a Strategic Partnership with the Federal Reserve System. [Read more]

Upcoming events I’m affiliated with:

The CBDC Think Tank is hosting a CBDC Papers Lecture Series on June 17 and 24 starting at 7am EST and running for 4 hours each day. [View list of papers and register here]