Benefits of e-Naira Cryptocurrency in the Financial System

The CBN has listed some of the Benefits of e-Naira Cryptocurrency in the Financial System. According to the CBN Governor, the e-Naira Cryptocurrecny which will soon be launched will strengthen the stability of the banking system as deposits become more diversified when more people are banked.

The Central Bank Digital Currency (CBDC) will also make it easier for the banking sector to comply with existing regulations governing anti-money laundering, client fraud protection, and payment system security and stability.

Mr Folashodun Shonubi, the CBN’s Deputy Governor for Operations, stated this during the Chartered Institute of Bankers of Nigeria’s (CIBN) advocacy debate series 4 webinar on Thursday in Lagos.

Central Bank Digital Currencies: Insights for the 21st Century Banker.’ was the theme of the event.

What the Deputy Governor of CBN said | Benefits of e-Naira Cryptocurrency in the Financial System

Shonubi said, “The Central Bank in its implementation has ensured the e-Naira feeds our economy and provides greater value.

“The central bank digital currency offers all the benefits of cash but in digital form. Every single digital currency is an electronic version of the cash, the legal tender. When you make a cash payment, settlement is done instantly; digital currencies entail the same promises and even more.

“CBDC offers a safer option from the privately issued cryptocurrency which have been based on the possibility to enable cheaper transactions but have now been used for investment.

“The intention is not to eliminate other forms of payment but to complement the current areas of payment options, thereby ensuring the stability of the payment system in the long run. I expect in the coming days we will see rapid inclusion rates.

“For banks in developing nations, it will enhance their liquidity, efficiency in national remittances and challenge the high cost of remittances as the world rebounds in the post-pandemic. I am of the view that the era of CBDC promotes greater opportunities, and the central bank must be aware of the risks and mitigate them.”

Speaking at the event, Lamido Yuguda, the Director-General of the Securities and Exchange Commission (SEC), one of the key players in the successful operation of the digital currency, said that the e-Naira, which is about to be launched in October, would help improve the capital market when combined with vibrant inter-developmental policies, which would lead to financial inclusion, especially in the capital market.

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The SEC boss said, “This is an opportunity for the fintech market to connect our people to existing opportunities in the financial market, connecting our people with investment opportunities in other climes. Once we do that, we would grow our market, Nigeria has 200 million people. We are blessed with a hardworking youthful population.

“This capital market would in turn finance the necessary infrastructure investment that this country needs today.

Recall

On the 27th day of July 2021, the CBN Governor, Godwin Emefiele, announced and confirm the launching of the Nigerian cryptocurrency (e-Naira) pilot program in October, after a Monetary Policy Committee (MPC) meeting.

He also discussed the value of the eNaira in Africa’s largest economy, citing cross-border trade facilitation, financial inclusion, monetary policy efficacy, increased payment efficiency, revenue tax collection, remittance improvement, and targeted social initiatives as examples.

The SEC, which had tried to regulate crypto on the grounds that it qualifies as a security transaction, announced earlier this month that the country’s digital currency, e-naira, was launched as a consequence of its collaboration with the CBN.

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