In a recent move, Nigeria’s Central Bank (CBN) has made strides towards the future of digital currency. Amid changes within the institution, CBN has refreshed its central bank digital currency (CBDC) project, the eNaira, and added a Near Field Communication (NFC) upgrade that promotes contactless payments. This functionality enables mobile devices and payment terminals to communicate effortlessly when in close vicinity, thus making it more practical and desirable for users.
CBN believes that the NFC technology will significantly drive the adoption of the CBDC. The eNaira project already incorporated QR codes. Still, the CBN is hopeful that the inclusion of breakthrough innovation will pave the way for a more user-friendly experience. Striving to utilize avant-garde technology, the eNaira platform is reportedly programmed with specific features. These exclusively limit the usage of CBDC payments to specific government initiatives, thus decreasing the chances of fraudulent activity.
The deputy director of CBN’s risk management department, Joseph Angaye, further elaborated on the functionality of these programmable features. According to Angaye, these could be tailored to provide targeted fund distribution to, for instance, farmers; they can ensure the funds are used for the intended purpose, like tool procurement, and not for unrelated activities.
This novel digital currency platform carries several benefits for retail users in Nigeria, including restriction of settlement risks and provision of rapid transaction processing. However, it hasn’t been all smooth sailing. Since its launch last year, the adoption rates of Nigeria’s eNaira have been somewhat underwhelming.
To counteract this, the Central Bank has explored a range of strategies to stimulate usage. They have implemented new use-cases in transportation sectors and incorporated USSD functionality into their service. Although these efforts are admirable, they haven’t yet proven successful, with former CBN Governor, Godwin Emefiele, blaming commercial banks for restricting eNaira’s growth.
Despite these stumbling blocks, CBN remains optimistic for the future, continually searching for innovative ways to encourage the use of eNaira. By maintaining its dedication to the CBDC and persistently improving its offerings, Nigeria hopes to pave the way in the adoption of digital currencies globally. With the NFC upgrade, only time will tell if this technology will indeed boost the popularity of the eNaira. Regardless, this development symbolizes an indisputable step towards the global integration of digital currencies, reshaping the landscape for future transactions.
Source: Cointelegraph
