Monday, January 17, 2022

CBN ignores Nigeria fintech community, awards e-naira contract to foreigners

CBN said it chose Bitt based on the company’s competence, efficiency, and implementation experience.

• August 31, 2021
CBN Godwin Emefiele (credit: Bloomberg)
CBN Governor, Godwin Emefiele (credit: Bloomberg)

The Central Bank of Nigeria has chosen Bitt Inc. as the technical partner for its much talked about digital currency, eNaira, discounting years of federal government efforts to encourage local content consumption in Nigeria’s digital economy.

The apex bank made the announcement in a statement signed by its spokesperson, Osita Nwanisobi, on Monday.

“The Central Bank of Nigeria has announced the formal engagement of the global fintech company, Bitt Inc, as the technical partner for its digital currency, named Enaira, which is due to be unveiled later in the year,” Mr Nwanisobi said.

The proposed digital currency, with its launch date set for October, is said to facilitate increased cross-border trade, accelerated financial inclusion, cheaper, and faster remittances.

The statement said that Bitt Inc. had been chosen from among highly competitive bidders based on the company’s competence, efficiency, and implementation experience.

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

The CBN said, “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 202I.”

Bitt led the development of the Eastern Caribbean Currency Union’s “DCash” – the first digital cash issued by a currency union central bank.

The statement added that the bank’s decision follows a trend of central banks worldwide preparing to adopt digital currencies in their countries as the acceptance and trade of digital assets continue to boom globally.  

This development comes after multiple actions by the Buhari-led regime taken against Nigerian fintech companies.

In February, the CBN had stifled the trade of digital assets, instructing banks to shut down accounts of customers involved in cryptocurrency transactions.

Despite staunch opposition from the CBN, Nigeria’s adoption and rates of cryptocurrency trades have continued to rise, leading the world in the adoption of crypto in 2021.

Nigeria boasts of a thriving financial technology environment. Payment platforms such as Flutterwave and Paystack offer digital wallets services to its customers.

Despite the Buhari-led regime’s support for the nation’s private technology sector, engaging the Barbados based company comes as a rebuff to Nigerian tech firms. 

Mr Nwasinobi did not return The Gazette’s request for comments about why the CBN overlooked Nigerian fintech ventures and outsourced the contract to foreigners.

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