Nigeria’s Central Bank To Launch Digital Currency Before 2022

By John Ikani

The Central Bank of Nigeria (CBN) has disclosed that plans are in top gear to commence the offering of digital currency before the end of 2021.

This was made known by the Director, Information Technology Department, Central Bank of Nigeria (CBN), Mrs. Rakiyat Mohammed at the banker’s committee meeting on Thursday.

“As I said, before the end of the year, the Central Bank will be making special announcement and possibly launching a pilot scheme in order to be able to provide this kind of currency to its populace,” she said.

The Director said about 80 percent of central banks in the world are exploring the possibility of issuing the central bank’s digital currency and Nigeria cannot be left behind.

On the banning of cryptocurrency, 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.”

What would Nigeria’s digital currency would look like? 

According to Ms Mohammed: “We have currency in two forms in Nigeria as of now, there are the notes and there are the coins. So the Central Bank currency is to be the third form of money which means just as we have electronic money, digital money is not new in Nigeria. Just as we are about the third or fifth in the whole world as far as advancement in the use of digital money is concerned. So this is going to compliment the coins and cash that we have. The Central Bank digital currency will just be as good as you having cash in your pocket and even as you have the cash in your pocket, you are going to have the cash on your phone.”

The director mentioned that the apex bank was looking at different use cases such as remittances. On the topic, she said, “We all know how money has to travel for someone to send money from Nigeria to abroad and it is huge money in Africa. We also know that a recent report by EfiNA was that our target was to achieve 80% financial inclusion. We are about 60 percent and at the rate at which we are going, we are not going to meet this target. Central Bank digital currency will accelerate our ability to meet this target.”

What you should know

A Central Bank Digital Currency (CBDC) represents a country’s official currency in digital form. As against printing money, the apex bank issues electronic coins and notes that are backed by the government, unlike existing cryptocurrencies.

Moves by the CBN to create a digital currency will help promote the cashless policy of the apex bank.

However, the high illiteracy level of the nation could pose a hindrance to the mass adoption of CBDC in the country except it embarks on awareness programs to ensure that the CBDC can function for all classes of Nigerians.