President Muhammadu Buhari on Monday unveiled the Central Bank Digital Currency (CBDC) otherwise known as e-Naira making Nigeria first in Africa to introduce the new innovative form of payment system.
SWIndependentnews.com.ng reports that the digital currency across the world including e-Naira serves to encourage rapid financial inclusion as well as support a resilient payment ecosystem.
Speaking during the brief ceremony at the Presidential Villa, Abuja, the President said there is estimation that adoption of CBDC and its underlying technology, called blockchain, can increase Nigeria’s Gross Domestic Product (GDP) by US$29 billion over the next 10 years.
According to President Buhari, the use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country.
“Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy. The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country” he said.
Buhari noted that the the journey to create a digital currency for Nigeria began sometime in 2017, but that work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers, Collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the National Communication Commission, integration of banking softwares across
the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.
Godwin Emefiele, the Central Bank of Nigeria, said the deployment of the e-Naira came following the completion of the preliminary work, when the researchers and experts at the CBN were able to clearly establish that a digital currency will drive a more cashless, inclusive, and digital economy and will complement the gains of previous policy measures and Nigeria’s fast growing payments platforms.
Emefiele said that among other things the e-Naira is expected to reduce the cost of processing cash, enable direct and transparent welfare intervention to citizens, increase revenue and tax collection, facilitate diaspora remittances, and also reduce the cost of financial transactions, while improving the efficiency of payments.
According to the CBN boss, the eNaira is the digital equivalent of the physical Naira with far more possibilities.
“Therefore, the eNaira is Nigeria’s CBDC and it is the digital equivalent of the physical Naira. As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira.
“To de-risk the process, the CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems and have implemented secure safeguards and policies to maintain the integrity of the financial system. Specifically, there will be strict adherence to the anti-money laundering and combating the financing of terrorism (AML/CFT) standards in order to preserve the integrity and stability of Nigeria’s payment system.
“Since the eNaira platform went live, there has been overwhelming interest and encouraging response from Nigerians and other parties across the world with over 2.5 million daily visits to the website with the following milestones: 33 banks are fully integrated and live on the platform. N500 million has been successfully minted by the Bank. N200 million has been issued to financial institutions. Over 2,000 customers have been onboarded. Over 120 merchants have successfully registered on the eNaira platform.
“Today, customers who download the eNaira Speed Wallet App will be able to perform the following: Onboard and create their wallet. Fund their eNaira wallet from their bank account. Transfer eNaira from their wallet to another wallet.Make payment for purchases at registered merchant locations” he said.
Emefiele also announced announced the introduction into the nation’s economy, a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”,
“Today, in addition to all policies and actions of the CBN to support the economy especially through the trying times of COVID-19, the apex bank is announcing a new financial instrument titled “The 100 for 100 PPP – Policy on Production and Productivity”, which will be anchored in our Development Finance Department under my direct supervision.
“Under this policy the CBN will advertise, screen, scrutinize and financially support 100 targeted private sector companies in 100 days, beginning from 01 November 2021, and rolling over every 100 days with new set of 100 companies, whose names will be published in National Dailies for Nigerians to verify and confirm” he added.
Source: Daily Independent.