Tuesday, September 28, 2021

CBN says e-Naira safer than Bitcoin, other popular cryptos

Folashodun Shonubi, the bank’s deputy governor in charge of operations, attended a seminar hosted by the Chartered Institute of Bankers of Nigeria in Lagos.

• September 10, 2021
CBN Godwin Emefiele (credit: Bloomberg)
CBN Governor, Godwin Emefiele (credit: Bloomberg)

The Central Bank of Nigeria (CBN) has ascribed stability to the banking system as an advantage of adopting its soon to be launched digital currency, e-Naira.  

Folashodun Shonubi, the bank’s deputy governor in charge of operations, made comments at a seminar hosted by the Chartered Institute of Bankers of Nigeria in Lagos, themed ‘Central Bank Digital Currencies: Insights for the 21st Century Banker.’

“The Central Bank in its implementation has ensured the e-Naira feeds our economy and provides greater value,” Mr Shonubi said. “The Central Bank Digital Currency (CBDC) will also make it easier for the banking system to comply with existing laws such as anti-money laundering, customer protection against fraud and ensuring the safety and stability of the payment system.”

Mr Shonubi stated that the e-naira would prove safer than “privately issued cryptocurrency”, he adds that the launch of digital currency would be to complement existing payment pathways, thereby ensuring a stable system. 

“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,” Mr Shonubi said.

The CBN had earlier announced the launch of its digital currency (e-Naira) pilot program in October. He also spoke on the importance of eNaira in Africa’s largest economy that included cross-border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social interventions.

Peoples Gazette reported in August that the apex bank had chosen Barbados-based financial tech company Bitt Inc. as the technical partner for the eNaira project. Nigeria’s adoption of digital currency and trade follows a trend of central banks worldwide deliberating on whether to adopt digital currencies in their countries. 

The e-Naira project came months after the CBN banned the trade of digital assets in the country, instructing banks to shut down accounts of customers involved in cryptocurrency transactions. The action was widely criticised as throwing the country of about 200 million back to the dark ages, especially as Nigerians had already gained worldwide recognition as critical cryptocurrency traders.

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