The Growth and Development of Currencies.

There is no doubt that the US Dollar($) is the primary currency of trade in the World; yes you read correctly.

There are other dollars such as the Australian and Canadian, but the US Dollar is most powerful of all.

Foreign Reserves for nations are held in US Dollars and that speaks a lot for the stable nature of the currency($)

I am one of those who believe that if not for the holding of foreign reserves in US Dollars, the US economy would have been overtaken by other economies of the world, such as China and Japan.

That being said, do you know that US Dollar 💵💸 has lost 95% of its value since 1913?

Do you also know that the Nigerian Naira💳 has, as well, lost 94% of it’s value since 1999?

Can you imagine the difference?!

What is responsible for this, you might ask?

Does Nigeria have sound and sustainable Monetary and Fiscal Policies to backup and grow the economy?

Is the economy sincerely grown around institutions rather than personalities?

What is the knowledge of how Nigeria borrows; the GDP to debt ratio, the population growth vis-à-vis the growth of the economy to be able to cater for the humongous difference?

What is the state of the nation’s
infrastructure and how are they maintained and managed over the years?

Many more questions beg for answers?

The devaluation of the current kind of currencies is what has given rise to Digital Currencies.

Sadly, most people in support of Digital Currencies, especially in Nigeria, are still very naive and don’t even understand the fiat currencies. The attraction for them is the encryption, low charges and the Person to Person (P2P) possibility.

The question then, is, do you think any Government of the world would allow a currency run concurrently with its present legal tender without any form of regulations?

If you, perhaps think the Central Bank of Nigeria for instance, doesn’t understand Crytocurrency, you are wrong.

What the Vice President of Nigeria said, wasn’t new at all; many of us in the Cryptocurrency Space had advocated regulation since August 2017 and proposed that to the CBN, but until the CBN and all stakeholders come up with a regulation that will give them the dashboard opportunity to monitor inflows and outflow, we may not be ready.
That intrinsically, is what most Cryptocurrency proponents do not want or are happy cannot be traced.

For anything to qualify as a legal tender, it must meet certain conditions and the Financial Systems Stability of a nation is part of what is being considered to give such approval.

Yes, Nigeria maybe slow in its moves and drives, but that is why we are where we are. I never expected it to receive express and unhindered approval, no way! 🤞🤞🤞

A Legal tender is anything recognized by law as a means to settle a public or private debt or meet a financial obligation, including tax payments, contracts, and legal fines or damages. A creditor is legally obligated to accept legal tender toward repayment of a debt. Whatever that thing is, MUST be backed up by law and generally and absolutely accepted.

Therefore, every and anything that has qualified as an acceptable means of exchange for Financial Transaction since inception, satisfied the following conditions:


This big question is:

Is Cryptocurrency Valid?

Is Cryptocurrency Legal?

Is Cryptocurrency Acceptable?

All these MUST be in place within the territorial integrity of a nation, to qualify as a Legal Tender.

A legal tender is not like a payment system where you have options, so it may not pass to make such comparison.

A nation must see it as valid before it can be accepted as a Legal Tender, otherwise, it is an affront to the current legal tender of any nation.

So, acceptability and usage lies solely on what the CBN permits within the ambit of its admissibility

Our hope and desire is, that proper regulation be put in place soon.
The Apex Bank wants to keep tabs on illicit financial flows and money laundering. If these still go undetected under this regulated economy, a free for all option will be much worse.

Rounding off on this week’s series, I deliberately didn’t tag any as part 1, 2 or so, because I don’t want to get you boxed up into a mole as it were.

Be that as it may, I got some feedback from the broadcasts especially that of yesterday where I mentioned Crytocurrency and the conditions anything MUST qualify to be a Legal Tender.

Some responses were emotionally laced rather than understanding the matter at stake.

Earlier in the week, I said the US Dollar which is the primary currency of trade in the world, is first Legal Tender in US and widely accepted for transactions even in Nigeria.

You can walk into a shop on Ahmadu Bello Way, in Abuja, Kano, Kaduna, Lagos and pay for a transaction with the US Dollars and it will be accepted. Can that be said of the Canadian Dollar or Australian Dollar? Your answer is as good as mine. Which other currency of the world enjoys a universal acceptability as the USD, may be the GBP and EUR. What of the Nigeria-China Currency Swap? How far with that highly celebrated agreement made few years ago?

Why are people storing monetary value more in US Dollars than the Naira or any other currency of the world?

It is because of its Validity, Legality and Acceptability.

Sadly it is still another country’s currency primarily and I tell you, you cannot trade with naira in the US or UAE, not even in our neighbouring Cotonou where we go to buy tokunbo cars.

Let’s get this understanding of the evolution of currencies and legal tender. Nigerians are the ones killing the naira, the fiscal and monetary policies are not yet there and until we start strengthening the Naira it will keep falling. Our Economy is still largely imported dependent, even though some concerted effort to grow our exports have not measured up.

Even the Crytocurrency that is being pushed forward, you still have to do a cross rate exchange with US Dollars and not the Naira, or any other currency.

For the records, I have invested in Cryptocurrency since 2017 alongside many others and lost a good amount of money, but this doesn’t change the fact that we are evolving and we hope the Managers of our Economy will do the needful ASAP.

If you learnt anything from this, kindly share with someone out there.

Dr. Emmanuel Idenyi Shaibu
animn, ace, f.hcd, f.dss, m.frcn, fimc, cmc, cms, FAiPA, DPA
The Millennium Entrepreneur

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