Steemit Engagement Challenge | S4W2 | Explanation of CBDCs by @jueco (#Burnsteem25)

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Hello friends,

I count it all joy to appear before this great community today, a community with hard-working moderators and a brilliant admin.

I appear before this great community in attempt to the steemit engagement challenge hosted by this community.

The topic for this week contest is mind-blowing and very interesting as it centers on CBDCs, please follow along as I begin.

WHAT IS YOUR UNDERSTANDING ABOUT CBDC (CENTRAL BANK DIGITAL CURRENCY)?

CBDC which is an acronym for Central Bank Digital Currency can be explained to be can be explained to be digital tokens/currencies just like cryptocurrency, but are being issued by the central bank.
And they are usually pegged to the value of the currency of the respective country.

Fiat currency is a money that is usually issued by the government and it is not backed by anything, be it silver or gold.

Fiat money is mainly seen as a form of ledger that can be used to for the exchange of good and services.

Traditionally, fiat currency came in the form of physical coins and note, but with the help of technology, fiat currency can now be used digitally and this is what we refer to as CBDC.

Using my country Nigeria for example, the Nigeria's currency is known as naira, then came the emergence of it's CBDC known as e-naira.

This digital currency can be used to buy goods digitally across Nigeria.

IS YOUR COUNTRY HAS ITS OWN CBDC? IF NOT, SHARE YOUR OPINION ABOUT ITS PRESENCE IN YOUR COUNTRY.

From the explanation o gave from the onset, it won't be difficult to discern that my country owns it's own CBDC.

As I earlier explained, my country's currency is known as Naira and it's CBDC is known as e-naira.

The value of e-naira is pegged to the current value of naira, since it is the CBDC of Nigeria.

Unfortunately, the CBDC of my country Nigeria has been put to a pause for some reasons which are yet to be resolved.

The first being the fact that they might not be able to monitor the transactions being done in naira and they might be a high circulation of Naira in the country which won't be too nice.

Another reason they put the CBDC to a pause is because we need to really understand the mode of operation of CBDC.

Nigeria is a developing country and still need to understand the mode of operation of CBDC, so they need to take things slowly.

IMPORTANCE OF CBDC IN THE FINANCIAL SYSTEM.

The Importance of CBDC in the financial system cannot be overemphasized because once the CBDC is initiated it will help boost the financial growth of the economy.

Once a country's CBDC has been initiated, it helps Facilitate international transactions smoothly and also attracts foreign investors to invest in a country.

The world is going global and many individuals prefer to perform transactions online, the initiation of a country CBDC will help the country compete with other cryptocurrencies for financial transactions.

The use of CBDC will prevent the long queue usually experienced in Nigeria's bank whenever one wants to withdraw or deposit money.
With the CBDC, it can be done easily without going to the banks.

WHAT DO YOU THINK IF IT IS THE NEED OF YOUR COUNTRY OR NOT?

From my point of view, I don't think Nigeria has a pressing need for a CBDC.

I feel that the CBDC is more useful for a fully developed country but Nigeria Is a developing country and cannot hold the responsibility that comes with using a cbdc.

Looking at the current economic condition of Nigeria, if a lot of e-naira is to be bought and traded in, it will greatly affect the country economy.

Something like this has happened earlier before when the price of Naira began to crash greatly and this was because many Nigerians began exchanging their Naira for us-dollars.

I feel my country Nigeria is not fully ready to make use of a CBDC.

ADVANTAGES AND DISADVANTAGES OF CBDCs.

There are lots of advantages and few dis-advantages of CBDC and they shall be explained below

ADVANTAGES OF CBDC

• HIGHER TRANSACTION VOLUME:

CBDC helps to increase the transaction volume of the country's currency, hereby making it readily available for users to own and trade at their home.

• MINIMIZE VISITS TO BANK:

CBDC helps to minimize the rate at which individuals visit the bank.

Whatever transaction you want to make can be done online, and as such you are your bank.

• IMPROVED SECURITY:

CBDC tends to offer more security than the conventional banking system.

With the operation of CBDC, it will be difficult for scammers to hack into your wallet and do away with your stolen funds, since your details will be recorded on the chain.

• CROSS BORDER TRANSACTIONS:

CBDC makes it easier and faster for international trades to take place.

Friends and families from other countries can easily send funds to one another without having to pay extra fee for liquidity.

DISADVANTAGES OF CBDC

• CENTRALIZATION:

This is one advantage of CBDC, despite the fact that it is done online, it is still under the control of central authority.

The central authority has the power to withhold ones fund, they still call the shots.

• DUMP OF PHYSICAL CASH:

When the CBDC is fully active in a country, citizens of such country will see no need to move around with physical cash of the country, hereby making it almost useless.

IS IT A GLOBAL NEED? GIVE YOUR OPINION ON IT.

Considering the effect CBDC will have on a country's economy, I feel it is a global need.
It helps facilitate international transaction, reduce the cost of transaction and also ease one the stress of going to the bank for financial transactions.

Also, checking the effect it has in the economy of countries that has implemented it, we can see that it is a global need.

CONCLUSION

Indeed we need the implementation of CBDC, as it tend to offer more good than harm to the world.

I appreciate the host of this wonderful contest, this contest is a very brilliant one and I commend the brain behind it.

I have given answers to all asked questions and I am happy to have participated in this contest, I eagerly await the next contest.