Since the beginning of human existence money has been an important part of every innovation and invention.
But how this money is created in real life is a little bit technical and unclear to most.
What caught my eye attention to this topic is the news about Nigeria re-designing the Naira currency.
The Central Bank of Nigeria (CBN) has said it will redesign, produce, and circulate new series of banknotes at N100, N200, N500, and N1,000 levels, Godwin Emefeile, governor of the CBN, said in Abuja, Wednesday.
While this may sound simple from the outside, the inside look is dark and fishy.
Just a month ago
Nigeria’s inflation increased for the eighth straight month to 20.77 percent in September of 2022 from 20.52 percent in the prior month.
Inflation is an understatement when it comes to Nigeria currency fluctuation with price of goods around the country.
Since the beginning of the year the currency has been going through consistent devaluation and the solution seems to be hinted towards "redesigning the currency" which I think is just a way of making sure the bank has enough liquidity to loan people money i.e giving the bank the power to keep creating money.
What Happened To The Old Currency Design
The concern made by CBN was that 85% of the currency is being held outside the banks reach.
The game of creating wealth is being played by many good and bad actors in the country but if redesigning is a way to help control the inflation then when will the new currency not find its way back to the 80% range thats outside of banks reach.
To me the problem isn't about banks not having enough liquidity, its a matter of trust and it seems banks are gaining less trust with the way they handle critical situations like this. They know most people won't be able to return these funds anyways so it's always going to be a win for them as they have the right to create money but the average joe has no such right.
This is why decentralization and cryptp adoption is sooner or later going to tale over the banking system and n developer would be able to say hey, it seems some whale are holding too much token outside of exchange, let's increase bitcoin suply. such will never happen here.
Anyways, I'm that's my two cents on the issue and if you have other additions hit the reply button. Thanks for reading