A report by the International Monetary Fund (IMF) expert suggests that demand for deposits in Nigerian commercial banks may reduce due to the introduction of eNaira.

In the publication released on Tuesday, Jack Ree, an economist with IMF, highlighted the need to manage potential risks that could spring in the cause of making transactions with the recently launched e currency.

He explained that the currency’s heavy reliance on digital technology warrants the need to adequately manage cybersecurity and operational risks associated with the digital currency.

 “…eNaira wallets may be perceived, or even effectively function, as a deposit at the central bank, which may reduce demand for deposits in commercial banks,” he said. “Relying as it does on digital technology, there is a need to manage cybersecurity and operational risks associated with the eNaira.”

The report came shortly after renowned financial expert Biodun Adedipe argued that the newly-launched e-Naira would not affect deposits of commercial banks.

Mr Adedipe said e-Naira could not replace deposits or reduce the ability of the banks to create credits. According to him, banks will not lose their deposits to digital naira because of limits on e-Naira wallet transactions.

However, Mr Ree in the IMF report explained that the eNaira wallets might effectively function, as a deposit at the central bank, resulting in a decline in the demand for deposits in commercial banks.

He highlighted monetary policy implementation, cyber security, operational resilience, and financial integrity and stability as other concerns that could spring up in the cause of transacting with the digital currency.

The eNaira was launched by President Muhammadu Buhari and CBN governor Godwin Emefiele at an elaborate event at the State House in October. 

Mr Emefiele, during the launch, disclosed that N500 million had been minted by the bank, of which N200 million was issued to financial institutions. He also noted that over 2,000 customers had been onboarded on the platform.