The Central Bank of Nigeria (CBN) has had to publicly insist that its eNaira project – one of the world’s first operational central bank digital currencies (CBDC) – does not threaten the country’s financial stability.
The October 9 press release came from CBN Answer to “news published on some media platforms,” suggesting that the eNira threatens financial stability in Nigeria. Some news pieces, like one published In Nigerian daily Punch, he referred to the recent report by CBN titled “The Economics of Cryptocurrencies: A Book of Readings.”
In the report, CBN experts highlighted the gradual rise in eNaira adoption, which was characterized by a 0.2% share compared to Nigerian banks’ liquidity. They also acknowledge that funds held by citizens in eNaira wallets cannot be used by commercial banks. A hypothetical threat that could arise from this observation is the lack of liquidity experienced by banks if eNaira is fully adopted. However, this fear is one of the fundamental theoretical aspects of the discussion around any central bank digital currency.
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In its statement, the CBN did not offer much explanation, limiting itself to outright dismissal of the allegations in the media and pointing to the “in-depth understanding of CBDCs” inherent in its report:
“The eNaira architecture continues to evolve and is undergoing modifications aimed at improving user experience across all interfaces. We encourage Nigerians to embrace technology to achieve greater financial inclusion, among other things.
A recent global survey with participants from 15 countries indicates that Nigeria has the most cryptocurrency-aware population in the world. According to a joint study by ConsenSys and YouGov, 99% of Nigerians are more knowledgeable about Web3 than people in major economies such as the UK, US, Japan and Germany.
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