As we launch eNaira
As we launch eNaira
By Boniface Chizia
My take is that we have taken this step essentially to be seen to be compliant. If we recall four months before the decision was taken to launch the digital currency, it is on record that the Central Bank instructed Deposit Money banks not to have anything to do with cryptocurrency. But when sound bites from high quarters informed that it is better to position the financial system not to be found wanting as certainly digital currency will be the future medium of exchange, the CBN geared up for the country to also launch it’s own version of digital currency even if it correct to observe that the CBN we were informed had under studied digital currency for the past four years.
I made the point that from where I stand the entire innovation must be seen as work in progress for our Central Bank as it must be the case with Central Banks in other jurisdictions. I reminded listeners that not too long ago China that had championed digital currency and has been on it for many years turned tails to suddenly raise some doubts about its viability.
And I concluded that its early to talk about the benefits of digital currency as we can only logically do so after it’s working is fully understood. It is fair to observe that the CBN during the launch identified improved financial inclusion, enhancement of the effectiveness of monetary policy, improved speed of and costless transactions as some of the many benefits of eNaira.
There is this talk that digital currency will aid financial inclusion but I am at a loss how those who have not embraced conventional banking would suddenly find the capacity to use the digital version! It runs contrary to what one would logically expect. We were also told before that massive illegal funds entered our economy through the digital currency ecosystem. But now suddenly we are informed that it will now make money laundering more difficult to perpetrate as the trail of transactions could be easily tracked. One aspect that has been highlighted as an advantage is the fact that digital currency don’t need costly infrastructure such as branch network to operate.
So, again no doubt it will all hang out in the light of experience. Even now some concerns are envisaged. To what extent will the use of wallets drain deposit money banks of liquidity? How will digital currency facilitate international person to person transactions without third party involvement? How is the Central Bank going to balance its role as a regulator with that of an operator in the context of eNaira?
All said, congratulations are in order that Nigeria can now be counted amongst the countries that have officially launched their own version of digital currency ready to reap it’s full benefits as they manifest. Infact the point has been emphasized that Nigeria is the first country in Africa to do so.
Boniface Chizea , a top-notch economic and business development consultant wrote from Lagos
