CBN outlines benefits of e-Naira digital currency in economy

*The Central Bank of Nigeria discloses its e-Naira digital currency will strengthen the stability of the banking system as deposits become more diversified when consumers of financial products and services are banked in the country

Isola Moses | ConsumerConnect

Besides ensuring the safety and stability of the payment system in the country, the Central Bank of Nigeria (CBN) has further restated the benefits of its e-Naira digital currency christened, the Central Bank Digital Currency (CBDC) slated for official launch October 2021.

ConsumerConnect gathered the Bankers’ Bank stated the e-Naira would strengthen the stability of the banking system as deposits become more diversified when consumers of financial products and services are banked.

Mr. Folashodun Shonubi, Deputy Governor, Operations, at CBN, who disclosed this at the Chartered Institute of Bankers of Nigeria (CIBN) Advocacy Dialogue Series 4 webinar, titled,  “Central Bank Digital Currencies: Insights for the 21st Century Banker”, held Thursday, September 9, 2021, in Lagos, said the CBDC would also make it easier for the country’s banking system to comply with existing laws.

Such laws, Shonubi noted, include anti-money laundering, consumer protection against frauds, and ensuring the safety and stability of the payments system in Nigeria.

The CBN Deputy Governor, Operations, reportedly said: “The Central Bank in its implementation has ensured the e-Naira feeds our economy and provides greater value.

“The central bank digital currency offers all the benefits of cash but in digital form. Every single digital currency is an electronic version of the cash, the legal tender.

“When you make a cash payment, settlement is done instantly; digital currencies entail the same promises and even more.”

He also stated: “CBDC offers a safer option from the privately issued cryptocurrency which have been based on the possibility to enable cheaper transactions but have now been used for investment.

“The intention is not to eliminate other forms of payment but to complement the current areas of payment options, thereby ensuring the stability of the payment system in the long run. I expect in the coming days we will see rapid inclusion rates.

“For banks in developing nations, it will enhance their liquidity, efficiency in national remittances and challenge the high cost of remittances as the world rebounds in the post-pandemic.

“I am of the view that the era of CBDC promotes greater opportunities, and the central bank must be aware of the risks and mitigate them.”

Lamido Yuguda, Director-General of Securities and Exchange Commission (SEC), in his remarks on at the forum, said that the e-Naira, which is about to be launched October 2021 would help improve the capital market when combined with vibrant inter-developmental policies, which would lead to financial inclusion, especially in the capital market.

“This is an opportunity for the FinTech market to connect our people to existing opportunities in the financial market, connecting our people with investment opportunities in other climes.

“Once we do that, we would grow our market, Nigeria has 200 million people. We are blessed with a hardworking youthful population,” said Yuguda.

He added: “This capital market would, in turn, finance the necessary infrastructure investment that this country needs today.”

It is recalled Mr. Godwin Emefiele, Governor of CBN, after the Monetary Policy Committee (MPC) meeting July 27, 2021, had confirmed the launch of the Bank’s digital currency (e-Naira) pilot programme October this year.

In respect of the benefits of the product, Mr. Emefiele has said these include cross-border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social interventions among others.

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