Nigeria plans to launch its central bank digital currency before the end of the year, according to a central bank official.
Speaking to the press, Rakiya Mohammed, an IT specialist at Nigeria's Apex Bank further disclosed the Central Bank with a commitment to the soundness and safety of Nigeria's financial industry, the CBN had started the journey of launching its digital money by setting up a committee to identify the likely pitfalls to enable it to play a central role in the emerging dispensation.
Taking to account that digital currencies increase transaction volume and accelerate payments, Nigeria's decision to create its own digital currency should increase the country's productivity, which has plummeted significantly due to the COVID-19 pandemic.
The Central Bank's change of stance came barely a few months after it barred Nigerian banks and payment service providers from operating or engaging with Crypto assets and their exchanges.
Global monetary officials, particularly in China and Nigeria, see crypto assets as a threat to their currencies and as such issued bans on cryptocurrencies. Still, a number of Nigerians buy Bitcoin at a premium despite the government ban.
Recent macros reveal many central banks around the world now see the importance to drive their traditional fiat currencies from physical to digital.
This disruptive technology is made up of digital tokens and electronic records representing the virtual form of the fiat currency of a country. Unlike traditional crypto assets, CBDC’s are centralized, tracked, and issued by the Apex bank of such jurisdiction.
They also possess the same functionality as traditional fiat, which includes the unit of account, store of value, and monetary reserve.
The proposed technology further eliminates the need for cash bills and thereby turning the legal tender into a series of codes.
Experts opine that Nigeria's monetary officials creating its own digital currency might be a big win for crypto enthusiasts. It's also an indication that the leading oil-exporting country's government is looking to tap into the opportunities that come with the use of digital currencies.