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E-Naira: CBN Intensifies Adoption Of Digital Currency In Payments Ecosystem ─Official

*The Central Bank of Nigeria is considering, among others, the possibility of making e-Naira digital currency adoption as a payment gateway towards making it more relevant to all socio-economic strata in the country

Isola Moses | ConsumerConnect

In the Bank’s efforts at deepening use of the e-Naira digital currency in the economy, the Central Bank of Nigeria (CBN) is considering a number of measures, including the possibility of making it a payment gateway in the West African country.

ConsumerConnect gathered Musa Jimoh, Director of Payments System Management Department of CBN, stated this development at the 2021 Business Luncheon of the Chartered Institute of Taxation of Nigeria (CITN) Thursday, December 9, 2021.

Mr. Godwin Emefiele, Governor of CBN

Jimoh said: “Conversations were ongoing with Financial Technology (FinTech) stakeholders” on the possibility of making e-Naira a gateway in the country.

A payment gateway is described as a technology that merchants use to accept debit or credit card purchases from consumers.

The platform collects consumer card information and encrypts it for processing.

The CBN Director of Payments System Management, represented by Chai Gang, said that the next phase of the project would see the use cases expanded in order to make e-Naira more scalable and relevant to all socio-economic strata in Nigeria.

According to him, ultimately, the Bankers’ Bank is looking at expanding the use cases of the Central Bank Digital Currency (CBDC), increasing its adoption, and making it more relevant to the payments ecosystem.

Jimoh also noted that the pilot phase of the project was unveiled with limited use cases, with a focus on person-to-person (P2P) and person-to-business (P2B) transactions.

The CBN is also considering onboarding Nigerians without smartphones and leveraging unstructured supplementary service data (USSD) to reach “the financially-excluded individuals” as well as places with low Internet connectivity, stated he.

The Director further said: “We are looking at developing offline use cases through USSD, which does not need strong data.

“Wearables will also help in areas where there is no Internet network. With these, people could just tap and transact as they go,” the director said.

Enhanced adoption of e-Naira should boost government revenue: CITN Chief

Meanwhile, Adesina Adebayo, President of CITN, has said he is hopeful that a wider adoption of the digital Naira will help the government to increase tax revenue, as it is expected to help relevant agencies to monitor and track transactions.

Adebayo noted the CBN would also provide a regulatory backbone for the disruptive cryptocurrencies in the country’s economy.

He stated: “Look at taxation from the perspective of incomes and transactions. When you have income and transact using e-Naira, it is easy to track both income and profit margin on the transaction.

“Tax comes in when the relevant agencies can track the transaction and ascertain the profits.”

Adebayo also disclosed that Nigeria’s Tax-to-Gross Domestic Product (GDP) is low because the country is deepening the tax net or expanding the horizon of the implementation framework.

“If these are the basis for accessing the low tax-to-GDP, it is important to ask how many Nigerians pay taxes.

“The second question would be how many people pay the right amount. eNaira will expand the net and boost tax revenue. This is the advantage of e-Naira,” the CITN President stated.

In his remarks at the event, Nasifi Abdullahi, Special Adviser to the Nigerian Senate President on Economic Matters, representing Senate President Ahmad Lawan, said the Federal Government would need to fine-tune strategies to leverage the digital economy to expand its revenue.

Lawan stated the digital economy could no longer be ignored as businesses were fast-moving online.

The Senate President also described the low tax-to-revenue profile of the country as both a prospect and challenge to the Nigerian economy.

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