The CBN’s director of information and technology Rakiya Mohammed during a webinar last Thursday declared that the central bank of Nigeria may pilot its central bank digital currency {CBDC} as early as October 1st this year
Nigeria as a developing country faced with the problem of financial inclusion , would need the help of a CBDC to make cash accessible and enable the population to participate in Nigeria’s growing e-commerce economy .
The central bank is also motivated by the high volumes of remittances that Nigeria receives. In 2020, Nigeria was the tenth largest remittance recipient in the world. A CBDC could reduce the cost of these low value, and high volume transactions sent by Nigerians working abroad to their families back home.
Meanwhile the central bank in February recapitulate its ban on banks transacting with cryptocurrency entities and pushed for careful regulations rather than a prohibition of the cryptocurrency .
“There is a role for regulation here. And it is in the place of both our monetary authorities and SEC to provide a robust regulatory regime that addresses these serious concerns without killing the goose that might lay the golden eggs”, said the Vice President Yemi Osinbajo at the Bankers Committee in February.
An e-naira might provide a counter to the rise of virtual currencies, which are steadily growing in popularity in the African nation.
Nigeria has been researching its digital currency since 2017, and last month revealed its plans for a pilot phase during the final quarter of 2021.
This makes Nigeria the second West African nation in 2021 to recently declare a launch date for the pilot phase of its CBDC. Leading the way is the bank of Ghana which has indicated that it will begin testing its digital cedi by September.
Meanwhile, India also declared last week that it may soon be piloting its digital rupee. The potential for using a CDBC for crossboder payments is also featuring prominently, including the latest trial between France and Tunisia
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