The Central Bank of Nigeria (CBN) has outlined why Nigeria requires digital currency, as it explains the economic implications and importance of a centralised and regulated digital currency in Nigeria.
In keeping with worldwide trends, the CBN had previously announced that it would launch e-naira, a digital version of the naira, in October.
The e-naira will be a legal tender, similar to the fiat naira; it will not replace, but rather complement the naira, and transaction anonymity will be ensured.
Rakitya Muhammed, CBN’s Director of Information and Technology, announced this virtually at the Committee of E-business Industry Heads’ Third Quarter Industry Forum in Abuja, FCT.
Muhammed noted that the introduction of the e-naira can catalyse Nigeria’s digital economy, boost cross border trade and enable better macroeconomic policy formulation.
Muhammed also disclosed that the design would soon be revealed as the apex bank had concluded its development.
Mohammed said, “If people adopt more of the usage of the e-naira, then we will be able to have more data to formulate better macroeconomic policies.
“And when countries come on board and create their own digital currencies then we will be able to have faster exchange of currencies and therefore we might be able to boost cross border trade at a much lower cost.
“Of course payment efficiency, even though we know that Nigeria has one of the best payment systems in the world, we will still be able to improve on that.
“We believe that the e-naira will be a catalyst for digital economy because the people who are outside the formal banking sector will be integrated.
“In terms of the e-naira design, it will be a legal tender just like cash which is one of the fundamental difference between it and the cryptocurrency.
“One, e-naira will be equal to one fiat naira, and we adopted a two-tier retail model that would be a lot less disruption into the financial system.
“Our banks, payment service providers and Fintech are all going to be onboard and we are going to key to the infrastructure they have already and incorporate the new system. It is not meant to replace the cash we have, but only to supplement it,” Mohammed said.