Despite placing suspension on dealing in other digital currencies through commercial banks in Nigeria, President Muhammadu Buhari has explained to Nigerians why he approved eNaira, a Central Bank Digital Currency (CBDC) for the country.
He made the explanation on Monday at the official unveiling of eNaira, Nigeria’s CBDC which made the record as the first government-backed digital currency in Africa.
The President it was imperative to move in similar direction like a handful of other countries such China, Bahamas, and Cambodia that have already issued their own CBDCs, so that Nigerian would not miss our the potential benefits of the blockchain technology.
He said, “In recent times, the use of physical cash in conducting business and making payments has been on the decline. This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new Digital Economy.
“Alongside these developments, businesses, households, and other economic agents have sought for new means of making payments in the new circumstances.
“The absence of a swift and effective solution to these requirements, as well as fears that Central Banks’ actions sometimes lead to hyperinflation created the space for non-government entities to establish new forms of “private currencies” that seemed to have gained popularity and acceptance across the world, including here in Nigeria.
“In response to these developments, an overwhelming majority of Central Banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.”
The president noted that a handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.
Quoting a 2021 survey of Central Banks around the world by the Bank for International Settlements (BIS), Buhari said it was found that almost 90 per cent are actively researching the potential for CBDCs, 60 per cent were experimenting with the technology and 14 per cent were deploying pilot projects.
“Needless to add, close monitoring and close supervision will be necessary in the early stages of implementation to study the effect of eNaira on the economy as a whole.
“It is on the basis of this that the Central Bank of Nigeria (CBN) sought and received my approval to explore issuing Nigeria’s own Central Bank Digital Currency, named the eNaira,’’ he said.
Equally, the Nigerian leader noted that his approval was also underpinned by the fact that the CBN has been a leading innovator ‘‘in the form of money they produce, and in the payment services they deploy for efficient transactions.”
He noted that Nigeria’s apex bank has invested heavily in creating a Payment System that is ranked in the top ten in the world and certainly the best in Africa.
“This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.
“They have also supported several private‐sector initiatives to improve the existing payments landscape, and in turn, have created some of the world’s leading payment service providers today,”he said.
Why I approved eNaira for Nigerians – President Buhari
