CBN’s digital currency to begin before 2022

The Director, Information Technology Department, Central Bank of Nigeria (CBN), Mrs Rakiyat Mohammed, stated at the banker’s committee meeting yesterday, that the apex bank will be launching a Central Bank Digital Currency (CBDC) before the end of 2021.

She stated, “As I said, before the end of the year, the Central Bank will be making special announcement and possibly launching a pilot scheme in order to be able to provide this kind of currency to its populace.”

The director made mention of the fact that about 80% of central banks in the world are looking into the possibility of issuing a central bank digital currency and Nigeria cannot be left behind. She also mentioned that the CBN had been exploring technology and had made tremendous progress for 2 years, so far.

The director explained what the CBDC would look like, stating that there were currently two forms of money in the country. She stated, “We have currency in two forms in Nigeria as of now, there are the notes and there are the coins. So the Central Bank currency is to be the third form of money which means just as we have electronic money, digital money is not new in Nigeria. Just as we are about the third or fifth in the whole world as far as advancement in the use of digital money is concerned. So this is going to compliment the coins and cash that we have. The Central Bank digital currency will just be as good as you having cash in your pocket and even as you have the cash in your pocket, you are going to have the cash on your phone.”

The director mentioned that the apex bank was looking at different use cases such as remittances. On the topic, she said, “We all know how money has to travel for someone to send money from Nigeria to abroad and it is huge money in Africa. We also know that a recent report by EfiNA was that our target was to achieve 80% financial inclusion. We are about 60 per cent and at the rate at which we are going, we are not going to meet this target. Central Bank digital currency will accelerate our ability to meet this target.”

What this means

The CBN looking into creating a digital currency will help promote the cashless policy of the apex bank, although the high illiteracy level of the nation could pose a hindrance to the mass adoption of CBDC in the country. The apex bank should also be ready to undergo awareness programs to ensure that the CBDC can function for all classes of Nigerians.

Credit: Nairametrics