The Central Bank of Nigeria (CBN) has keyed into the idea of Nigeria’s Vice President, Prof. Yemi Osinbajo, on digital currency and other blockchain technologies.
This is as the apex bank disclosed on Thursday that its much-anticipated digital currency will be launched on October 1, 2021.
Mrs Rakiya Mohammed, CBN’s Director of Information Technology, who made this known during a private webinar, said since 2017 the bank had been conducting research towards the launch of digital currencies, adding that it may conduct a proof of concept before the end of 2021.
Recall that Vice President Osinbajo while reacting to the ban of cryptocurrency by the CBN in February, said there is a role for regulation whereby both the monetary authorities and the security and exchange commission would “provide a robust regulatory regime that addresses their concerns without killing the goose that might lay the golden eggs.”
He also called for the scaling up of government-private sector interventions because, according to him, “the task of national development requires that we fire on all cylinders, after all at one stage China was building 1.9million housing units per year.”
The VP further suggested that the country’s regulators must consider embracing emerging and disruptive technologies, because “As seen in many other sectors, disruption makes room for efficiency and progress”, and that “We must act with knowledge and not fear.”
He then summed up his argument by positing that “Cryptocurrencies in the coming years will challenge traditional banking, including reserve banking, in ways that we cannot yet imagine, so we need to be prepared for that seismic shift.”
Taking a cue from this, the CBN began the move for the adoption of electronic currency, which was first announced by Mr Godwin Emefiele, during the Monetary Policy Committee (MPC) in May.
Emefiele had said a digital currency will soon become a reality in the country, and that the central bank had already set up its committee which was working on the concept.
The CBN governor had further restated the determination of the apex bank to drive the e-Naira project during the recent 306th Banker’s Committee meeting, pointing out that the process was ongoing.
Mohammed was quoted by Nairametrics as saying the digital currency would enhance macroeconomic management, boost economic growth, facilitate cross border trade, boost financial inclusion and monetary policy effectiveness.
The CBN Director said the digital payment instrument would further improve payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.
She added that the innovation would also benefit the fintech ecosystem by enhancing operational efficiency, opportunities for fintech start-ups in building services and products as well as financial inclusion that will contribute to economic growth, and the creation of a new system complementing the traditional payment system.