On Monday, August 30, 2021, the Central Bank of Nigeria (CBN) announced that global fintech company, Bitt Inc. will be its technical partner for the launch of Nigeria’s digital currency, eNaira, scheduled for October 1, 2021.
According to a statement signed by Osita Nwanisobi, CBN Director, Corporate Communications, Bitt Inc. was chosen because of its “technological competence, efficiency, platform security, interoperability, and implementation experience.”
However, the news has elicited negative reactions on social media with people calling the apex bank out for not looking inwards for a technical partner, pointing out that there are companies just as competent in Nigeria. But are there?
What services will Bitt Inc. be offering the CBN?
Bitt Inc. will provide the technical skills required for deploying, managing, and maintaining the infrastructure.
In a chat with Techpoint Africa, Founder, Chairman Blockchain User Group and Vice Chairman Blockchain Industry Coordinating Committee of Nigeria, Chimezie Chuta, explained the function as writing codes and creating a digital infrastructure for the eNaira.
A look at Bitt Inc.’s website reveals that it will mint, issue, and destroy central bank digital currencies, functions that the CBN says it will perform according to a supposedly released presentation.
However, Chuta says the CBN does not have the technical skills to perform the functions independently.
The company was also contracted by the Eastern Caribbean Central Bank (ECCB) in 2019 to issue a digital currency within the Eastern Caribbean Currency Union (ECCU).
Are there Nigerian companies that can perform these functions?
Yes, and Chuta points out that there are companies in the country that can provide the CBN with the technical expertise it requires to launch the eNaira. One of them is Bantu, an Africa-led company that develops Blockchain infrastructures.
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So why didn’t the CBN choose from Nigeria?
In CBN’s defence, Chuta believes local technical partners might not be the best option given that the Blockchain network — Hyperledger Fabric — the CBN chose to run the eNaira is created by a consortium of “big entities including IBM and a couple of other big organisations that are not local.”
Interestingly, he points out that the CBN did not leave Nigerian companies out.
“There is a team of Nigerians, an Africa-based company called Interstellar that has a functional Blockchain infrastructure deployed for the CBN on a testnet that is still running.”
Why did the CBN choose Hyperledger Fabric?
It’s not clear why Hyperledger Fabric was chosen as the Blockchain solution for the eNaira, but Chuta believes the apex bank has good reasons for making the decision.
Nevertheless, he has reservations about the solution, as it’s his opinion that Hyperledger Fabric is a closed Blockchain infrastructure, “which may not be easy for the kind of innovation that we have previously advised the CBN on.”
Chuta advised the CBN on creating a Blockchain solution that not only serves the eNaira but a variety of other things such as identity management and supply chain management, basically killing several birds with one stone.
“Bantu Blockchain is an Africa-led Blockchain team that could have built what CBN wants.”
With the availability of African and Nigerian companies competent enough to provide the services Bitt Inc is offering, does CBN truly have a genuine reason to look outward?
Keep your eyes peeled to this article as we’ll be sharing more updates from industry players and experts.
