Key Takeaways
- CBN gave Nigeria e-naira special status
- The central bank has high expectations for the e-naira
- Nigeria has a storied history with crypto-assets
This development was revealed earlier in the week by the local news outlet ThisdayLive. According to the report, the CBN believes that providing special designation to the e-naira will help address operational and regulatory risks.
The bank also hopes that the increased efficiency and financial inclusion that the CBDC will promote will offset the initial costs tabled to develop the national digital currency. The report further exposes that a new partnership between the public and private sectors is expected to emerge with the deployment of the e-naira.
The central bank would focus on the issuing and allocation of the CBDC to financial institutions. These institutions will handle the distribution of the digital currency to retail businesses and individual customers.
Financial insiders view this system as an effective method to ensure the implementation and success of the e-naira. It is understood that the CBN wants to begin pilot operations of the e-naira from October 1, 2021. This date represents Independence day for the country and could be chosen to herald a new digital wave for Africa’s most populous nation.
Nigeria has a storied history with blockchain technology, with the CBN banning cryptocurrency transactions in February. The decision led to a massive outcry from citizens and members of the crypto community.
Many Nigerian youths view crypto-assets as a hedge against inflation in a country where the naira has lost more than 50% of its value in two years. The e-naira, despite being spun positively by the CBN, is regarded as a digital form of the failed naira by many financial analysts. It will be interesting to see how the apex bank intends to work in the coming months.
Do you think Nigeria can successfully deploy its digital currency?
