Even though the former governor was ousted nearly two months ago, the Central Bank of Nigeria (CBN) continues to be committed to central bank digital currency (CBDC) project, is showing no indication of abandoning it.
According to a report by local news outlet The Sun, the central bank recently improved CBDC mobile application by incorporating Near Field Communication (NFC) technology. This update allows mobile devices and payment terminals to interact while in close proximity, facilitating convenient and contactless eNaira payments.
Although the previous version incorporated QR codes, CBN is reportedly stressing that the latest addition of NFC technology will play a significant role in increasing CBDC adoption rates. Joseph Angaye, deputy director of the risk management department of CBN, reportedly revealed that banking regulators are committed to leveraging innovative technologies to improve user experience.
Picture of the Nigerian Central Bank building. Source: Daily Post
Embracing the idea of taking advantage of cutting-edge technology, Angaye reportedly revealed that the CBDC will be equipped with programmable features. He explained that this programmable feature could limit CBDC payments exclusively to designated government programs, thereby reducing the risk of fraud.
In further elaborating, Angaye reportedly emphasized that the programmability of the CBDC allows targeted allocation of funds to farmers, enabling specific goals such as acquisition of tools. By adopting this approach, funds transferred to their eNaira wallet become non-transferable for unrelated purposes, ensuring that the intended use is strictly adhered to.
As per the report, Angaye highlighted the many advantages of CBDC for retail users in the country, such as mitigating settlement risks and enabling fast transaction processing. He stressed that eNaira aims to address financial inclusion issues, and Nigeria’s pioneering role in adopting CBDC provides valuable insights for various players and economic entities to learn from the country’s experience.
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Nigeria launched eNaira in 2021 to be part of an exclusive group of countries with CBDC offerings. However, adoption rates have fallen below expectations, prompting central banks to explore several options to encourage adoption.
The central bank is launching use cases in the transportation sector while including USSD functionality in the offering. With low adoption rates, former CBN Governor Godwin Emefiele blamed commercial banks for hindering eNaira’s growth for the sake of their profitability.
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