The Central Bank of Nigeria (CBN) attributes the banking system’s stability to the benefits of introducing their upcoming digital currency, e-naira.
CBDC to Make it Easier for Traditional bank to Comply with Existing Laws
Folashodun Shonubi, the bank’s deputy governor in charge of operations, spoke at a seminar on “Central Bank Digital Currency: Insights from Bankers in the 21st Century” organised by the Association of Chartered Bankers of Nigeria in Lagos.
“The Central Bank in its implementation has ensured the e-Naira feeds our economy and provides greater value,” Mr Shonubi said. “The Central Bank Digital Currency (CBDC) will also make it easier for the banking system to comply with existing laws such as anti-money laundering, customer protection against fraud and ensuring the safety and stability of the payment system.”
Mr Shonubi stated that electronic naira was more secure than “privately issued cryptocurrencies,” adding that the introduction of digital currency will complement existing payment channels, thereby ensuring system stability.
“For banks in developing nations, it will enhance their liquidity, efficiency in national remittances and challenge the high cost of remittances as the world rebounds in the post-pandemic. Therefore, I am of the view that the era of CBDC promotes greater opportunities, and the central bank must be aware of the risks and mitigate them,” Mr Shonubi said.
CBN to Start its Pilot Program for e-Naira Next Month
CBN had already announced the start of its pilot program for digital currencies (e-Naira) in October. He also spoke about the importance of eNaira in Africa’s largest economy, including facilitating cross-border trade, financial inclusion, monetary policy effectiveness, improved payment efficiency, tax collection, improving remittances and targeted social interventions.
This top bank chose the Barbados-based fintech company Bitt Inc. as its technology partner for the e-Naira project. Nigeria’s digital currency and trading adoption follows the trend of global central banks considering adopting digital currencies in their country.
The e-Naira project was launched a few months after CBN banned digital asset transactions in the country and ordered banks to close customer accounts involved in cryptocurrency transactions. This action has been widely criticised for bringing around 200 million people back into the dark ages, mainly because Nigerians have gained worldwide recognition as important cryptocurrency traders.