President Muhammadu Buhari has unveiled Nigeria’s digital currency, also known as e-Naira.
The unveiling ceremony took place on Monday at the conference room of the First Lady’s office in the Presidential Villa, Abuja.
Speaking at the brief event, President Buhari noted that the Central Bank of Nigeria (CBN) has been a leading innovator in the world and the best in Africa.
He said: “This move was 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. They have invested heavily in creating a payment system that is ranked among the top 10 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.”
According to the President, the journey towards the introduction of digital currency in Nigeria began over three years ago.
He said the birth of the digital currency was a result of a strong collaboration between the CBN, the relevant ministries and agencies.
“While the journey to create a digital currency for Nigerian begun sometimes in 2017, work identified over the past several months include several brainstorming exercises, deployment of technical partners and advises, collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission, integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the Central Bank’s digital currency system,” the President stated.
Gains
The President highlighted the gains of digital currency to citizens and the Nigerian economy, in line with current global trends.
“Let me note that aside from the global trend to create digital currencies, we believe that there are Nigerian specific benefits that cut across different sectors and concerns of the economy. The use of the Central Bank’s digital currency can help move more people and businesses from the informal into the formal sector thereby, creating the tax base of the country.
“Alongside digital innovations, the Central Bank’s digital currency can foster economic growth through better economic activities. Indeed, some estimates indicate that the adoption of the digital currency and its underlying technology, called blockchain, can increase Nigeria’s GDP by US$29 billion over the next 10 years,” he said.
He also added that the advent of coronavirus pandemic further necessitated the use of digital currency.
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.”
He commended the Governor of the Central Bank and his team for working tirelessly to make the launch of e-Naira a reality.
Central Bank Governor, Godwin Emefiele, related the successes recorded by the apex bank to the support it receives from President Buhari.
He said: “Mr. President Sir, permit me to say that it is to your leadership that owing to the enormous work being done at the CBN, Nigeria has one of the most advanced payment systems in the world and certainly the best in Africa, which is befitting to the country as the largest economy in Africa.
“With growing interest in Central Bank Digital Currency (CBDC) around the World, the Central Bank of Nigeria (CBN) commenced extensive study, consultations, identification of use cases and the testing of the CBDC concept in a Sandbox environment as far back as 2017.
“The objective of the research was to establish a compelling case for the adoption of a digital currency in Nigeria to enable a more prosperous and inclusive economy for all Nigerians. Following the completion of the preliminary work, the researchers and experts at the CBN were able to clearly establish that a digital currency will drive a more cashless, inclusive, and digital economy and will complement the gains of previous policy measures and our fast growing payments platforms. As such, the CBN decided to implement its own CBDC and to name the digital currency, the e-Naira.”
Emefiele added that the e-Naira will bring about significant transformation to Nigerians and the country itself.
He said: “The CBN believes the e-Naira will make a significant positive difference to Nigeria and Nigerians, including supporting a resilient payment system ecosystem; encouraging rapid financial inclusion; reducing the cost of processing cash; enabling direct and transparent welfare intervention to citizens; increasing revenue and tax collection; facilitating diaspora remittances; reducing the cost of financial transactions, and improving the efficiency of payments.
“Therefore, the eNaira is Nigeria’s CBDC and it is the digital equivalent of the physical Naira. As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 e-Naira.”
The Highlight of the brief ceremony was the symbolic unveiling of e-Naira by President Buhari, assisted by Vice President Yemi Osinbajo and the Governor of the Central Bank.
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