The Central Bank of Nigeria (CBN) has announced that they are preparing for the launch of its central bank digital currency (CBDC). According to the statement, it is quite possible that we will meet the digital currency called digital naira at the end of 2021.
Nigeria’s digital currency coming this year
Rukayat Mohammed, Director of Information Technology (IT) at CBN, made this statement yesterday at a virtual briefing to the banking committee. Adding that the central bank has been researching the technology for four years, Mohammed said:
“We will announce the launch date very soon. We should have a digital currency by the end of the year. We will probably launch a pilot to provide that kind of money to the public.”
The world’s leading economies and central banks have already begun to explore the possibility of issuing digital currency. The European Central Bank (ECB) is also working on the launch of the digital euro by 2023, while the Federal Reserve is preparing to publish its digital dollar research paper in the summer of 2021.
China had its eye on 2022: Nigeria could be the first
On the other hand, China, which is a pioneer in the development of CBDC, plans to export digital yuan by 2022 Beijing Olympics. It seems that the central bank of Nigeria has stepped up development and may be the first global bank to officially issue a CBDC.
Adoption of public cryptocurrencies, especially Bitcoin, accelerated in Nigeria last year. In addition, increasing economic uncertainties have pushed people to adopt digital assets. There is also a growing concern that as central banks are working on CBDCs, they will likely enact a crypto ban, as we have seen in China recently. But Ryakat Mohammad speaks very harshly about the possibility of banning digital assets:
“Let me categorically state that cryptocurrencies like Bitcoin and others are not under the control of the central bank. They are completely private decisions made by individuals.”
To launch the digital naira, CBN will interact with several industry players to explore various technology options as it moves to the next phase of development.