As Nigeria persists in transforming its monetary system, the commitment of the Central Bank of Nigeria (CBN) to their central bank digital currency (CBDC) project remains stout, despite a changeover of the bank’s governor. The central bank’s latest move to bolster the eNaira CBDC adoption includes the integration of a cutting-edge technology known as Near Field Communication (NFC). NFC technology promises to streamline contactless payments, evolving from prior usage of QR codes for transactions, in a grip to deliver seamless interactions between mobile devices and payment terminals.
As stated by Joseph Angaye, Deputy Director of the CBN’s risk management department, at a workshop in Abuja, the implementation of this technology will play an instrumental role in boosting the acceptance of the CBDC. The amplification of technological advancement resonates across the globe, as such; the CBN cannot afford to be a laggard. This vision led to the birth of the NFC-equipped eNaira app.
The eNaira app, lauded as a driver of Nigeria’s ambitious digital agenda, comes with abundant benefits including its programmable capabilities. From restricting use within precise locations to identifying specific purchasable items, the app asserts its value, notably in deploying intervention programs. Features like these ensure prudence, only allowing funds to be used as intended and thus preventing any form of financial misconduct.
Two sides to this coin, however, must be addressed. The eNaira rollout in 2021 perhaps didn’t mimic the splash that Nigeria, one of the first countries to launch a CBDC, initially anticipated. The consequent underwhelming adoption rate has propelled the CBN to employ diverse strategies to spike usage, including introducing use cases in the transport sector and integrating USSD functionality to their offerings. Is this heralding a revolution, then?
Yet, existing hurdles need to be addressed – Former Governor Godwin Emefiele cast blame on commercial banks, citing that they seemed more concentrated on generating profits rather than expanding the reach of the CBDC. Additionally, the country’s somewhat turbulent relationship with digital currencies merits further scrutiny. In 2021, the CBN prohibited all banks and financial institutions from facilitating transactions involving digital currencies. Concurrently, Nigeria maintains dominance in terms of volume in digital token transactions performed via peer-to-peer platforms outside the United States.
A lot of potential in the sweep for a digital-forward Nigeria yields promise but there’s yet much ground to cover before the dichotomy between digital currencies and traditional banking resolves in the country’s drive for digital supremacy. Time will tell how the effectiveness of the policies and the adoption of the eNaira turns out in the technology-driven, future-forward African powerhouse.
Source: Cryptonews
