eNaira is old news in the world of Central Bank Digital Currencies and crypto-currencies. The eNaira announcement is a few months old. In the fast moving world of crypto-news it has already been buried under the success of blase, yacht loving primates and the news that one successful, but highly controversial company has rebranded as the world beyond this world.
When uber-hypesters gaslight web3 as hype and the holders of some of the most centralized crypto-currencies talk incessantly of decentralization, this eclipse should come as no surprise. When eNaira was announced, there was a bunch of articles in many of the leading crypto publications. Bitt is the main technology and service provider for eNaira.
The CEO of Bitt, Brian Popelka, who was thrust into the limelight, complained to me that he had been on the interview circuit for what seemed like days on end, and he did not see an end to his travails. However, it seems like he can rest easy, at least on the public relations end. eNaira has faded into the background in the cryptosphere. However, due to the reasons discussed below, it is one of the most significant developments of 2021, with ramifications well into 2022 and beyond.
The Platform Model
The CBN (Central Bank of Nigeria) design document lays out the platform model as a central tenet. This involves creating public infrastructure, the key element of which is the Central Bank Core Ledger. The provision of API access to existing PSPs and Financial Institutions allows them to innovate in their interactions with ordinary users, who are agnostic to the Core Ledger. This design helps preserve the rich ecosystem of existing payment solutions while changing the lower rails on which the system runs.
Decentralization acolytes will complain that this is a centralized system. A truly decentralized system does not exist today, in spite of the protestations of this devoted band. Fiat currency systems are by nature under the control of the sovereign money creators; which are the people of any country, through the medium of a disinterested infrastructure.
In practice, there is capture of the state by private actors who benefit. On the evolution of automation of such systems towards programmability and the characteristics of a decentralized autonomy, only time will tell, with the codification of legal controls and constructs in DAOs. Today’s latency ridden post-facto cure is an inefficient means of control compared to ex-ante prevention.
However, this must not degenerate into a pre-crime unit a la Minority Report. These are the fine-lines to be walked and explored, since one or the other extremes can degenerate into crimes of their own. The current version of the eNaira wallet allows only for micro-payments, limiting their effect on deposit accounts, as well as protecting the incumbents from destructive change.
Such a layered platform approach fits nicely with the basic CBDC design architecture arrived at by Bitt for DXCD.