As Nigerians are eagerly or keenly awaiting the launch of the African Continent’s second Central Bank Digital Currency the eNaira with the AKL or the Lumi digital currency being the first, I will be highlighting key similarities between the LUMI digital currency and the CBN’s eNaira.
What is the eNaira?
The eNaira or electronic Naira is the digital representation of the the physical Naira. It is a Central Bank Digital Currency (CBDC) issued by the Central Bank of Nigeria (CBN) and meant to be transacted solely online via a wallet. Naira is the official currency of Nigeria. Before independence and even during the early years after independence, Nigeria was using the British Pound until after the civil war that Nigerian government introduced a new currency (the Naira) in a bid to making the Biafran Pound valueless and to secretly make South-East leaders poor.
What is the Lumi digital currency?
The digital Lumi or the digital AKL is the digital representation of the physical Lumi. It is a Central Bank Digital Currency (CBDC) issued by the African Diaspora Central Bank (ADCB) and meant to be transacted solely online via a wallet (Swifin). Lumi or AKL is the official currency of the African Diaspora Sixth Region (ECO-6). This currency before now and even presently is used by the Maroon kingdom issued by the bank of Accompong.
What are the Similarities between the LUMI currency and the eNaira?
The only differences between these two digital currencies are the names (eNaira and Lumi or AKL) and the authorities that issues them. However, they are interrelated in few words as follows;
1. Both are digital currencies: The eNaira and the Lumi are both digital currencies. This means that, these two currencies can only be transacted online through a wallet.
2. Both are issued by a Central Bank: Just as eNaira will be issued by the Central Bank of Nigeria, so also the Lumi currency is issued by the African Diaspora Central Bank.
3. Both are not Cryptocurrencies: The only underlying difference between cryptocurrency and digital currency is that; Cryptocurrencies are permission-less and are mined in existence by cryptography while digital currencies are permissioned and issued by a Central Authority. Digital currencies are regulated by the government why cryptocurrencies are not regulated.
4. They need a transaction wallet: Both the Lumi and eNaira must be transacted through a wallet. All digital currencies needs a wallet for transactions.
5. Both are pegged against something: The Lumi is pegged against four grains of gold, this means that when you make cross border payments for goods and the seller demands value for the Lumi he has received, the ADCB will ship the gold value of the Lumi to the person. In like manner the eNaira is Pegged against the physical Naira making it not to be as strong as the Lumi.
Can both currencies be used to swap each other?
Of course YES, both currencies can be used to swap each other. The CBN is already assuring Nigerians of universal transfer and exchange for all currencies. Lumi can be used to purchase eNaira and eNaira can also be used to purchase Lumi. This has ever been the expectations of the Eco-6 Lumi stimulus beneficiaries and for those in Nigeria it is already a dream come true.
