President Muhammadu Buhari says the adoption of the Central Bank Digital Currency (CBDC) and its underlying technology, called blockchain, can increase Nigeria’s GDP by $29billion over the next 10 years.
The President said this Monday in Abuja at the official launch of the eNaira.
President said the introduction of the eNaira would enable the government to send direct payments to citizens eligible for specific welfare programmes as well as foster cross border trade.
He said that alongside digital innovations, CBDCs can foster economic growth through better economic activities, increase remittances, improve financial inclusion and make monetary policy more effective.
“Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy.
“The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country,” he said in a statement issued by his spokesman, Femi Adesina.
The President said, with the launch of eNaira, Nigeria has become the first country in Africa, and one of the first in the world to introduce a Digital Currency to her citizens.
He commended the Governor of the Central Bank, Godwin Emefiele, his deputies and the entire team of staff who worked tirelessly to make the launch of Africa’s first digital currency a reality.
The President, who assured Nigerians of the safety and scalability of the CBDC system, said the journey to create a digital currency for Nigeria began sometime in 2017.
Why eNaira?
The President also used the occasion of the unveiling of the eNaira to painstakingly explain to Nigerians why he approved the use of the digital currency.
“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.
“A handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs.
“A 2021 survey of Central Banks around the world by the Bank for International Settlements (BIS) 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.
“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.
What is eNaira?
In his remarks, the CBN Governor said 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 eNaira,” he said.
Emefiele added that the CBN had given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen these ecosystems and has implemented security safeguards and policies to maintain the integrity of the financial system.
He pledged that there would be strict adherence to the anti-money laundering and combating the financing of terrorism (AML/CFT) standards in order to preserve the integrity and stability of Nigeria’s payment system.
According to Emefiele, since the eNaira platform went live, there had been overwhelming interest and encouraging response from Nigerians and other parties across the world with over 2.5 million daily visits to the website.
He listed the following milestones: ”33 banks are fully integrated and live on the platform, 500 million has been successfully minted by the Bank, N200 million has been issued to financial institutions, over 2,000 customers have been onboarded and over 120 merchants have successfully registered on the eNaira platform”.
