The local news agencies have been told by an official from Nigerian Central Bank that they are expecting the launch of a CBDC (Central Bank Digital Currency) before the year ends. Rakiya Mohammad, the CBN IT director, has declared during a news briefing while attending a meeting of the Bankers Committee. She revealed that the matter has been under consideration throughout the best time of recent two years, and now it seems to be in a strong position for having a viable product to be launched sooner than the start of 2022. Mohammad disclosed that a special declaration is going to be made on behalf of the Central Bank, which will be followed by a possible launch of a pilot scheme for the distribution of digital currency to the common masses.
The local cash currency ‘naira notes’ will not be replaced by the latest digital one. Rather the new currency will be utilized as a complementary option. Foreign remittances will be easier to make from the country as a result of the issuance of digital currency. As the third parties and forex charges are eliminated, digital currencies provide convenient and simple foreign remittances. This might be one of the reasons behind the El Salvadoran adoption of Bitcoin for legal tender.
Currently, the experts are manufacturing the architecture and dealing with privacy concerns. Nigeria, just the same as China did when launching digital yuan, has chalked out the procedural opening of the digital currency initiating with a pilot program only in certain areas to get confident before the official release nationwide. Mohammad further stated that according to the CBN estimation, 80 percent of the global central banks are striving for their digital currencies, and Nigeria does not want to be stay behind, so it has crossed that quest.
Cryptocurrency and Nigeria: love and hatred
The Nigerian announcement about CBDC is a curious step as the nation has seen crackdowns against the digital currency in recent days. The government had transgressed the normal procedures for even mentioning the ban over cryptocurrencies in the previous months. Not stopping here, it declared the ban over the financial resources and the commercial banks and incorporating the digital currencies and their exchanges by ordering the cease over crypto holding accounts.
The prominent reason behind this ban was the viewpoint of the Nigerian authorities that the cryptocurrencies were causing a considerable shortage of foreign currency as well as the depreciation of the local currency naira regarding the black market. But later on, the ban was modified to allow for peer-to-peer crypto trading.