The Nigerian Central Bank has set the date for the launch of its digital currency as October 1st. During a private webinar where strategies for the digital currency initiative were outlined, the CBN and all stakeholders came to this decision. Rukiya Ibrahim, the CBN Director of IT, revealed at the end of the webinar that the bank has been working on this crypto project since 2017.
“Macro-management and growth, cross-border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention,” she believes the benefits of this digital currency will be.
Nigeria will join the list of African countries working on their own central bank digital currency, including Ghana, South Africa, and Tunisia if this digital currency is launched. (CBDC)
The CBN is known for having unfriendly policies toward digital currencies like bitcoin, so this news came as a surprise. The Central Bank banned cryptocurrency transactions in the country in February 2021, claiming that cryptocurrency poses a risk of criminal activities such as money laundering, terrorism, fraud, and the concealment of illegal money flow.
The apex bank then issued a circular and a five-page statement prohibiting all crypto transactions in the banking sector and ordering all regulated banking institutions to close the accounts of anyone involved in such transactions.
The CBN’s announcement of a digital coin comes as the country’s Vice-President, Yemi Osibanjo, has urged the CBN and SEC to make room for new financial technologies to be adopted.
“First and foremost, there is no doubt that blockchain technology in general and cryptocurrencies, in particular, will challenge traditional banking, including reserve banking, in ways we cannot yet imagine in the coming years.
We must be ready for that seismic shift, which may occur sooner rather than later,” he said at the time during his speech to the Banking Committee Vanguard.
“Regulation has a role to play here. And it is the responsibility of both our monetary authorities and the SEC to establish a strong regulatory framework that addresses these serious concerns while avoiding killing the goose that may lay the golden eggs. As a result, rather than prohibition, thoughtful and knowledge-based regulation is required. The point I’m trying to make is that some of the exciting developments we’re seeing require caution and caution in their implementation, but we must act with knowledge rather than fear.”
Trading in digital currencies is quickly becoming a popular pastime among Nigerians of the Millennial and Gen-Z generations.
As the quality of governance deteriorates and the value of the naira declines, more people are turning to digital currencies, particularly cryptocurrency, to protect the value of their money and investments. According to data from Paxful, a peer-to-peer network, Nigeria is the second-largest market after the United States, with over 60,215 bitcoin worth $566 million traded in the last five years. What remains to be seen is whether Nigeria’s young generation has enough faith in the government to trade in central bank digital coins.