The e-naira continues to generate controversy on its adoption rate, use cases, and more recently, claims by some observers on the threat it poses to the economy. The Central Bank of Nigeria (CBN) has publicly backed its digital currency, the e-naira, which it released to rival the growing popularity of private cryptocurrencies like Bitcoin (BTC).
The Central Bank’s Stance on E-Naira
In an Oct 9 press release, the nation’s top banking regulator stated that the Central Bank Digital Currency (CBDC) is not a threat to financial stability, urging all stakeholders to accept its use. The CBN emphasizes the importance of embracing the e-naira as a means to counter the influence of private cryptocurrencies.
“A recurring theme in the book is the interest of regulators, such as the CBN, in the role of cryptocurrencies as speculative investments and the potential threat they harbor for financial stability.”
– CBN spokesperson
This statement highlights the CBN’s concerns about the impact of private cryptocurrencies on the economy and their use as speculative investments.
Concerns Raised About E-Naira
On Oct 4, local news outlet Punch reported on the dangers posed by the e-naira based on the CBN’s report, “Economics of Digital Currency.” The report warns about conversions from fiat to digital currency and suggests that the economy may be impacted as funds converted to digital wallets become solely domiciled with the central bank, limiting access to commercial banks for loans and other financial activities.
“The articles in the book provide an in-depth understanding of CBDCs generally and the workings of the eNaira in particular, highlighting issues and challenges in implementation and adoption.”
– CBN spokesperson
In response, the CBN clarified that their previous report does not indicate any harmful effects of the e-naira on the economy, suggesting a lack of understanding of the report. The central bank also reaffirmed the threat posed by private cryptocurrencies to the economy.
The CBN is committed to improving the e-naira by enhancing its structure and user interfaces across multiple platforms. Recently, several use cases have been announced for the e-naira, aiming to make payments easier for traders, farmers, and students.
Financial experts acknowledge the potential of the digital currency to widen the tax net and include demographics that were previously absent from the economy. Leveraging blockchain technology, the e-naira presents new opportunities for economic growth and development.
