On Thursday, June 10, the Central Bank of Nigeria (CBN) announced that it preparing for the launch of the central bank digital currency (CBDC) aka Digital Naira and that should happen before the end of 2021.
Rukayat Mohammed, the Director of Information Technology (IT) for the CBN made this disclosure yesterday in a virtual briefing to the Banker’s committee. Interestingly, she also added that the central bank has been exploring the technology for four years now Mohammed said:
“Very soon we would make an announcement on the date for the launch and by the end of the year, we should have the digital currency. We would possibly launch a pilot scheme in order to provide this kind of currency to the populace.”
Top economies of the world and their central banks have started exploring the possibility of issuing a digital currency. The European Central Bank (ECB) is also working on the Digital Euro launch by 2023 while the Federal Reserve is set to release the Digital Dollar research paper this summer 2021.
On the other hand, China which has been a forerunner in the CBDC development is planning to issue the Digital Yuan by the Beijing Olympics 2022. It looks like the Nigerian central bank has accelerated the development and could be the first global bank to officially declare its CBDC.
The States of Cryptocurrencies in Nigeria
The adoption of public cryptocurrencies, especially Bitcoin, has accelerated in Nigeria over the last year. Besides, the growing economic uncertainties have pushed people towards adopting digital stands.
Since central banks are working on their CBDC, there’s been a growing concern if they would probably issue a crypto ban, as we recently saw in China. But Ryakat Mohammad hasn’t been much harsh on the prospect of banning digital assets. She said:
“Let me state categorically that cryptocurrency such as Bitcoin and the rest of them are not under the control of the central bank; they are purely private decisions that individuals make.”
To launch the Digital Naira, the CBN will explore several technology options while engaging several industry players as they move to the next stage of development.