AUS
NZ
UK
CA
USA
FRA
GER
ESP
ITA
NLD
PRT
SWE
GRC
IND
POL
BRA
ZAF
RUS
CHN
UAE
Highlights
- Nigeria’s eNaira and Ghana’s e-Cedi will soon make it to the real world
- CBDCs are backed and regulated by the central bank of the country
- Bitcoin and Ether have given negative returns to investors over past one week
Countries are racing against time to launch their own central bank digital currency or CBDC. Nigeria, the largest economy in the Africa, is set to launch its CBDC in October. eNaira, the digital version of official currency Nigerian Naira, will be launched in partnership with Bitt Inc. Bitt is a Fintech company.
It is widely reported that Nigerians have warmed up the cryptocurrency frenzy amid a boom in prices. In the country, unemployment is in double-digits and inflation is a big cause of concern. Nigerian Naira has become undervalued in the wake of weak macroeconomic indicators.
The Central Bank of Nigeria had earlier mandated banks to stop assisting Nigerians in purchasing crypto assets. The governor, Godwin Emefiele, is of the view that the Nigerian CBDC can infuse efficiency in remittances. Earlier, El Salvador adopted Bitcoin as legal tender to make cross-border transactions low-cost and quicker.
Ghana, another African country, is also rolling out the trial of its CBDC this month. Ghana’s CBDC will be known as e-Cedi. Ghanaian Cedi is the official currency of the country.
A major CBDC was launched by China earlier this year. The CBDC, digital yuan, was rolled out in select Chinese cities for trial purposes. Digital yuan was issued by the People’s Bank of China to lenders to be passed on to their customers.
However, CBDC acceptance is not dampening spirits of crypto backers.
The cryptocurrency frenzy has gripped institutional investors. In his tweet a couple of weeks earlier, business intelligence firm MicroStrategy’s Michael Slayer announced purchase of 5,050 bitcoins that took the company’s holding to 114,042 bitcoins.MicroStrategy is the largest corporate investor in Bitcoin.
Also read: MicroStrategy bitcoin holding soars, dwarfs Tesla's
Amid these big developments in the CBDC and crypto space, let’s find out how two of the biggest cryptocurrencies are faring.
Bitcoin
The most popular crypto asset, with the largest market cap, Bitcoin peaked to nearly US$65,000 in April 2021. At the time of writing, one Bitcoin was priced at nearly US$44,000. Over the last seven days, it has lost nearly 8 per cent.
Also read: Top 5 most expensive NFTs ever sold including CryptoPunks
The market cap of Bitcoin is nearly US$830 billion, which is nearly half of total market cap of the crypto market.
Image description: Market cap of Bitcoin and Ether
Ether
The most formidable competitor to Bitcoin’s market hegemony is Ethereum. Ethereum’s crypto token is Ether. At the time of writing, Ether was priced at nearly US$3,100. It is down nearly 14 per cent over last seven days.
Also read: Microcap cryptos: What are they & where to find them in 2021?
Ether commands a market cap of nearly US$367 billion. The blockchain can be used to launch ERC-20 tokens and by developers to create smart contracts.
Other crypto assets like Cardano (ADA) and Dogecoin have also attracted investors’ interest. Both have a market cap running in tens of billions of dollars.
What next?
The CBDC roll out by Nigeria and Ghana can lead to developed nations like Canada and the US speeding up their CBDC launches. The features of eNaira and e-Cedi are yet to be revealed. Despite the launch of CBDCs and recent dip in the price of major crypto assets, the crypto market is likely to remain one of the most favored investment destinations of many investors.
