The Central Bank of Nigeria (CBN) has issued a statement on Monday, seeking to dispel misconceptions surrounding its Central Bank Digital Currency (CBDC), known as the eNaira. The CBN emphasized that the eNaira does not pose a threat to Nigeria’s financial stability, countering recent speculations and reports suggesting otherwise.
In a press release, Dr. Isa AbdulMumin, the Director of Corporate Communications at the CBN, addressed concerns that had arisen from media outlets and social media discussions, specifically related to the eNaira’s potential impact on financial stability. He indicated that these concerns stemmed from a misinterpretation of certain sections of the CBN’s recently released publication, “Economics of Digital Currencies: A Book of Readings.”
AbdulMumin pointed out that a recurring theme in the book was the regulator’s, including the CBN’s, interest in the role of cryptocurrencies as speculative investments and their potential threats to financial stability. He clarified, “The nexus implied is unconvincing. In the ordinary course of things, the CBN does not join issues on news commentary; however, we are constrained to clarify the reports to ensure that misunderstandings are not fostered.”
Furthermore, the CBN emphasized that the eNaira’s structure is continuously evolving, with ongoing modifications aimed at improving user experience across all platforms. The bank encouraged Nigerians to embrace the technology as a means of achieving greater financial inclusion.
The CBN reiterated that the eNaira was introduced to strengthen Nigeria’s payment system and not to replace or compete with existing banking institutions. As part of its efforts to enhance financial services, the CBN recently approved the eNaira as a payment option for diaspora remittances, further liberalizing the payout process for recipients.
The eNaira was officially unveiled on October 25, 2021, by former President Muhammadu Buhari, aligning with the CBN’s mission to enhance the payment system and facilitate transactions. The CBN anticipates that the introduction of the eNaira will contribute significantly to Nigeria’s Gross Domestic Product (GDP), with a potential increase of $29 billion over the next decade.
Nigeria was a pioneer in Africa and one of the first globally to introduce a digital currency. It’s important to distinguish between digital currencies, like the eNaira, which are regulated by authorities such as the CBN, and cryptocurrencies, which operate outside of regulatory frameworks and pose risks to the global financial system.
In summary, the Central Bank of Nigeria seeks to clarify that the eNaira is designed to enhance the country’s financial infrastructure and foster greater financial inclusion, rather than destabilizing the financial system as recent reports may have suggested.