Mr. Godwin Emefiele, Governor of CBN

Why CBN appoints Bitt as technical partner on e-Naira digital currency: Official

*Central Bank of Nigeria says the selection of Bitt Incorporated from among highly competitive bidders was based on the Fintech company’s technical competence, efficiency, platform security, interoperability, and implementation experience

*We think that this is a noble idea, and we are not the first…. Many other central banks are at advanced stages of revealing their own digital currencies ─Godwin Emefiele, Governor of CBN

Isola Moses | ConsumerConnect

In preparation for launch of the country’s digital currency branded ‘Speed Wallet, the Central Bank of Nigeria (CBN) has announced the formal engagement of Bitt Incorporated, a global Fintech company as a technical partner, for its proposed e-Naira digital currency.

Mr. Osita Nwanisobi, Director of Corporate Communications Department at CBN, in a statement said the selection of Bitt Incoporated from among highly competitive bidders was based on the company’s technical competence, efficiency, platform security, interoperability, and implementation experience.

 

Photo: CryptoPlacesDirectory

The statement said: “In choosing Bitt Incoporated the CBN will rely on the company’s tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean countries.

RELATED CBN Releases CBDC Guidelines, Launches E-Naira Digital Currency October 1

“Bitt Inc. was key to the development and successful launch of the Central Bank Digital Currency (CBDC) pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021.”

ConsumerConnect reports Bitt is a Barbados-based financial technology “company that utilises blockchain and distributed ledger technology to facilitate secure peer-to-peer transactions with seamless mobile money across a suite of Bitt’s Software and Mobile Applications.”

Earlier, in regard to the benefits of the financial inclusion initiative, Mr. Godwin Emefiele, Governor of CBN, has disclosed that the Central Bank Digital Currency (CBDC) will herald increased cross-border trade, accelerate financial inclusion, and lead to cheaper cum faster remittance inflow.

Emefiele said the digital money, also known as cryptocurrency, would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection in the country.

He recently announced that a national digital currency would be launched October 2021.

READ ALSO CBN’s Framework To Strengthen Cybersecurity Resilience In Other Financial Institutions

The apex bank had also said the digital currency would be treated as a critical national infrastructure to protect it from operational and cybersecurity risks.

Further clarifying the e-Naira project, the CBN governor stated: “You have some Naira in your account and you chose to convert part of your Naira into a digital wallet by way of a digital currency. We will support that.

“If, for instance, you have N10million in your account. Of course, when this starts, the CBN will move some of the balances of banks with CBN to those banks in digital currency.

The CBN Governor further stressed: “So you go to your bank, you have N10million and you want to move N2million out of your N10million into a digital currency.

“They’ll debit your account and move it to your wallet of N2million digital currency, which you can spend across countries.”

Emefiele added, “So we think that this is a noble idea and we are not the first…many other central banks are at advanced stages of revealing their own digital currency.

“Our own digital currency, which is tagged e-Naira, will certainly come into operation, by the special grace of God, by October and we are working very hard for this.”

READ ALSO Nigerian Currency: We’re working with EFCC, Police, others to prosecute abusers of Naira ─CBN

He also said: “We believe that transactions will be cheaper and more efficient, as there will be less to complete.

“And in terms of financial inclusion, we believe that with over 30 percent of bankable adults still outside the financial system, the ability to have offline payment through our e-Naira initiative will bring most of them into the formal financial sector.”

He added: “The use of cash is declining everywhere in the world, just as in Nigeria and with the advent of digital commerce, which is booming in the country, more and more people are adopting the use of electronic money to facilitate digital commerce.

“So our e-Naira is a digital representation of cash, which means as a fiat currency, it is a fiat currency that will be just as acceptable as the physical or analogue Naira.

“We recognise the need for wide stakeholder engagement and education to be able to create awareness for the use of e-Naira as alternative to cash to further drive towards a cashless society.”

IMF’s stand on adopting crypo-assest as a national currency

Though the CBN had openly warned Nigerian investors against cryptocurrency transactions previously, the International Monetary Fund (IMF) as well reportedly called for caution by countries seeking to use crypto-assets as their national currencies. According to the global financial institution, the demerits of adopting crypto-assets as a national currency outweigh merits, agency report said.

IMF was said to have given the advice in a post on IMFBlog titled: “Cryptoassets as National Currency? A Step Too Far”.

The transnational financial institution has acknowledged that the new digital forms of money have the potential to provide cheaper and faster payments, enhance financial inclusion, improve resilience and competition among payment providers, and facilitate cross-border transfers.

Nevertheless, IMF stated that the potential benefits cryptocurrencies are not a straightforward process.

It noted that it requires significant investment as well as difficult policy choices, such as clarifying the role of the public and private sectors in providing and regulating digital forms of money

Some countries might be tempted by a shortcut ─adopting crypto-assets as national currencies, adding, “many are indeed secure, easy to access, and cheap to transact.”

IMF stated: “We believe, however, that in most cases, risks and costs outweigh potential benefits.

“Crypto-assets are privately issued tokens based on cryptographic techniques and denominated in their own unit of account.”

Then, the organisation added the proviso that “their value can be extremely volatile. Bitcoin, for instance, reached a peak of $65,000 in April and crashed to less than half that value two months later.

“And yet, Bitcoin lives on. For some, it is an opportunity to transact anonymously—for good or bad.

“For others, it is a means to diversify portfolios and hold a speculative asset that can bring riches but also significant losses.”

Kindly Share This Story