Dr. Biodun Adedipe, Chief Consultant, B. Adedipe Associates Limited

E-Naira will not affect commercial banks’ deposits, says expert

*Dr. Biodun Adedipe, Chief Consultant at B. Adedipe Associates Limited, has stated the commercial banks will not lose their deposits to digital Naira because of limits the Central Bank of Nigeria has stated in the regulatory guidelines on e-Naira wallet transactions

Isola Moses | ConsumerConnect

Besides financial inclusion, Dr. Biodun Adedipe, Chief Consultant at B. Adedipe Associates Limited, has stated the e-Naira digital currency the Central Bank of Nigeria (CBN) recently introduced would not affect the deposits of commercial banks negatively.

Dr. Adedipe said this at the recent National Business Extra Fourth Anniversary Lecture/Awards, in Lagos.

The expert at the forum spoke on the theme: “Cryptocurrency vs E-Naira: Issues, Prospects and Challenges in Nigeria Economy”.

ConsumerConnect had reported as part of the digital economy cum digital transformation agenda of the Federal Government towards enhancing financial inclusion in the West African country, President Muhammadu Buhari formally activated the e-Naira, as the country’s Central Bank Digital Currency (CBDC) Monday, October 25, 2021, at the Presidential Villa, Abuja, FCT.

The CBN also stated the formal launch of the country’s digital currency, the e-Naira, designed by its technical partner Bitt Incorporated, with the theme, “Same Naira, More Possibilities”, would be part of its efforts at advancing the boundaries of payments system to make financial transactions easier and seamless for Nigerian consumers.

According to Dr. Adedipe, who was the Guest Speaker at National Business Extra Fourth Anniversary Lecture/Awards, said e-Naira could not replace deposits or reduce the ability of the banks to create credits, agency report said.

The Chief Consultant of B. Adedipe Associates stated: “It has limits on the amount that can conveniently be carried in a physical wallet.”

He further stressed that banks would not lose their deposits to digital Naira because of limits on e-Naira wallet transactions, as the Bankers’ Bank clearly stipulated in the Circular and Regulatory Guidelines on the e-Naira.

The economist also explained that cumulative balance limits and transfer limits introduced by the CBN on Tier 1, 2 and 3 e-Naira wallet were small compared with activities of commercial banks.

According to CBN, the cummulative balance limit for Tier 1 is N300,000 with transfer limit of N50,000; Tier 2 balance unit is N500,000 with transfer limit of N200,000.

The apex bank as well pegged Tier 3 cumulative balance limit at five million Naira with transfer limit of one million Naira.

As regards the benefits of the Nigeria e-Naira digital currency to consumers, Adedipe noted that it would eliminate the cost of printing and minting currencies in the country.

It would eliminate restrictions in making cross-border payments, enhance financial inclusion and allow users to avoid the cost and restrictions in transactions on digital platforms of commercial banks.

The economist, however, disagreed with insinuations that the e-Naira was introduced because of foreign exchange volatility.

He rather attributed foreign exchange volatility to speculation and the country’s huge import dependency, report said.

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