The Central Bank of Nigeria (CBN) is to unveil a digital currency, Director of the Information Technology Department, Rakiya Mohammed, has disclosed.
Mohammed, who made the disclosure at the end of the 306th Bankers’ Committee meeting, clarified that the digital currency would be accessible to all Nigerians.
She said the pilot scheme, being carried out in the last two years, would be unveiled before the end of the year. Central Bank Digital Currencies (CBDCs) are electronic versions of fiat money issued by central banks and backed by the reserves of the issuing countries. Unlike cryptocurrencies, which are decentralised, CBDCs are controlled by the issuing authorities.
Different apex banks have disclosed their intentions to issue digital currencies as the global system battles the disruption of cryptocurrencies.
CBN Governor, Godwin Emefiele, had at the recent Monetary Policy Committee meeting, hinted that a committee was working on the modalities of issuing the country’s digital currency, which could be the electronic version of the naira.
Mohammed promised that the planned digital currency would operate alongside other virtual currencies, but warned that the CBN does not have control over cryptocurrencies, which have been labelled as too risky to invest in.
She said: “The plan to launch a digital currency is for Nigeria to join the league of other nations like China. It is going to help us accentuate the financial inclusion strategy that we are behind schedule at only 60 per cent. It is going to simplify payments, as well as reduce the cost of international payments.
“It will also reduce the cost of cash management. Anyone with a phone can do transactions seamlessly. The pilot is to be launched before the end of the year. We will announce the programme in due course. The launch of digital currency does not liberalise the other digital currencies that we ban in Nigeria because they are not under CBN supervision. They remained banned.”
The director cautioned that those who play in the volatile crypto investment do so strictly on a personal basis, as nobody would stop them.
The Director, Banking Supervision, Haruna Mustafa, said the Bankers’ Committee discussed diverse issues, including the ongoing CBN collaboration with managing directors of banks to launch domestic cards.
He said the proposed CBDC would help to promote financial inclusion.
Also speaking, the Group Managing Director, Access Bank Plc, Herbert Wigwe, submitted that the committee also resolved that all card schemes would be registered locally to enhance efficiency of the payment system and conserve foreign exchange earnings.