According to Christopher Eniayemo, the decision to print new naira notes could have occurred via DeFi, involving Nigerians and aiding readiness for the change.

Blockchain technology can help solve economic problems in Nigeria and throughout the African continent. Blockchain technology has the potential to revolutionize various aspects of economies around the world, and Nigeria is no exception. The country has faced challenges with its currency, the naira, including shortages and fluctuations. In this article, we will explore how blockchain can play a crucial role in averting the shortage of Nigeria's naira.

Nigeria, like many developing nations, has experienced economic instability and it often reflects in the fluctuations of its national currency, the naira. Traditional financial systems have struggled to provide stability and transparency, leading to a need for innovative solutions.

Transparency and Accountability Blockchain's fundamental feature is its transparency. Every transaction recorded on a blockchain is visible to all participants in the network. This transparency can combat corruption and enhance accountability within the financial system, addressing one of the root causes of the naira shortage. By implementing a blockchain-based system for recording financial transactions, the Nigerian government can ensure that every naira spent or allocated is traceable and accounted for. This level of transparency builds trust among citizens and investors, ultimately contributing to a more stable economic environment.

Reducing Fraud

Fraudulent activities have been a significant contributor to economic challenges in Nigeria. With blockchain's cryptographic security measures, transactions become highly secure and tamper-resistant. This can significantly reduce the risk of fraudulent activities such as counterfeit currency or embezzlement.

Implementing blockchain in financial institutions can create a more secure and resilient system, protecting the integrity of the naira. This increased security can attract foreign investors and boost confidence in the local economy.

Financial Inclusion

A significant portion of Nigeria's population remains unbanked or underbanked. Blockchain technology can facilitate financial inclusion by providing a decentralized and accessible platform for financial services. With blockchain based solutions, individuals without access to traditional banking can participate in the economy, thereby increasing the circulation of the naira. Smart contracts, self-executing contracts with the terms of the agreement directly written into code, can be utilized to create financial services like microloans or insurance without the need for traditional intermediaries. This empowers individuals and small businesses, fostering economic growth and stability.

Cross-Border Transactions

Nigeria heavily relies on imports for various goods and services. However, traditional cross-border transactions are often slow, expensive, and prone to errors. Blockchain can streamline international trade by providing a transparent and efficient platform for cross-border transactions.

Utilizing blockchain for international trade can reduce transaction costs, eliminate delays associated with multiple intermediaries, and provide real-time tracking of goods and funds. This not only benefits the national economy by promoting international trade but also ensures the steady flow of the naira in the global market.

(DeFi) Solutions

The rise of decentralized finance presents an opportunity for Nigeria to leverage blockchain technology in creating alternative financial systems. DeFi platforms, built on blockchain offer various financial services such as lending, borrowing, and trading without traditional intermediaries thereby reducing dependency on centralized authorities and mitigating the impact of economic shocks. This decentralized approach can contribute to the stability and availability of the naira, especially during times of crisis.

In Blockchain technology has the potential to transform Nigeria's financial landscape and avert the shortage of the naira. By enhancing transparency, reducing fraud, promoting financial inclusion, facilitating cross-border transactions, and embracing decentralized finance solutions, the country can build a more resilient and stable economy.

However, it's essential to acknowledge the challenges and ensure that the implementation of blockchain is accompanied by robust regulatory frameworks and public awareness campaigns. With careful planning and strategic adoption, Nigeria can harness the power of blockchain to overcome its currency challenges and pave the way for a more prosperous future.

Bringing the blockchain system to Nigeria and Africa as a whole will help promote the advancement of DeFi and give citizens control over their own monies and economy. Blockchain technology provides the technical infrastructure and principles that empower DeFi to operate in a decentralized, transparent and secure manner, offering users a wide array of financial services without the need for traditional financial intermediaries.

However, the current Nigerian President, Bola Tinubu, released a manifesto during his campaign, which, if implemented would allow the use of blockchain technology and cryptocurrencies in the nation’s banking and finance sector.

The manifesto suggests reviewing existing Nigerian Securities and Exchange Commission regulations on digital assets to make them more business-friendly. The new regulation provides a framework for regulating digital assets like cryptocurrencies and other digital tokens in Nigeria.

In 2022, Nigeria imposed limits on the amount of cash individuals and businesses can withdraw from banks and ATMs in an attempt to push a “cashless-Nigeria” policy and increase the use of its CBDC, the eNaira.