Godwin Emefiele, governor of Nigeria’s central bank, .Photographer: Chris J. Ratcliffe/Bloomberg via Getty Images• Nigeria joins Bahamas, Sweden, Cambodia, South Korea as pioneers of CBDC• We are ready for rollout, CBN insistsBut the eNaira take-off is causing unease in the banking sector even as the concept note has admitted the project could unsettle banks as it comes with disintermediation risk.
The project kicks off as the global community embraces the race for CBDC creation. Today, about 10 central banks are in the pilot stage of their CBDCs, while six have executed proof of concept. Some countries, including China, are positioning their digital currency project as the lead strategy for internationalising their currencies.
On the readiness of the underlying infrastructure for the rollout, Director of Corporate Communications at CBN, Osita Nwanisobi, told The Guardian, yesterday, that the apex bank was fully ready. A professor of economics and international finance expert, Ken Ife, said banks, like other industries, have no control over the evolution and impacts of blockchain. He said bankers would either smartly retool their operations to leverage the new technology or be left behind in the process.
Users are also expected to be linked with a commercial bank for complaint with Anti-Money Laundering and Combating the Financing of Terrorism guidelines even as Nigeria’s CBDC leans towards the account model. There is, however, no sufficient information in the document to show how banks will make revenues from their role in the implementation of the digital naira.
“Specifically, patterns of stringent capital management measures may emerge as banks maintain a conservative stance in lending and reassess their investment in financial inclusion drive, which is a long-term objective towards creating new value for their business. The CBN is wary of this risk and has restricted the eNaira payment system to micropayments.
The least users, who are only required to hold telephone numbers while awaiting the National Identity Number , are entitled to an upper daily spending limit of N20,000 and a cumulative balance of N120,000. This category refers to millions of financially excluded Nigerians. The CBN has highlighted the benefits of eNaira to the economy to include the deepening of financial inclusion; but Adonri disagrees, saying the level of illiteracy in the country will restrict the adoption to the elite, as millions of unlearned Nigerians might be unable to key into the system.
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