Central Bank of Nigeria announces digital currency partner
05:38, 31 August 2021
Nigeria’s central bank has made fintech firm Bitt its technical partner for the eNaira digital currency, which is due to be launched in October 2021.
The Central Bank of Nigeria (CBN) is pursuing a central bank digital currency (CBDC) for a number of reasons, according to its governor Godwin Emefiele.
These include increased cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows, easier targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency, and tax collection.
Giant ambitions
According to a statement from the central bank, the CBN greenlit Project Giant, as its CBDC pilot is known, in 2017 since when the digital currency sector has expanded rapidly.
“Given the significant explosion in the use of digital payments and the rise in the digital economy, the CBN’s decision follows an unmistakable global trend in which over 85% of Central Banks are now considering adopting digital currencies in their countries," the statement added.
The CBN’s selection of Bitt, from among highly competitive bidders, was hinged on the company’s technological competence, efficiency, platform security, interoperability, and implementation experience,” it added.
The e-Naira is a legal tender for the entire country and the CBDC will be non-interest bearing – considered key for ensuring digital currencies do not impact monetary policy. There will also be a transaction limit for customers, and a value-based transaction limit, according to the local news site, Nairametrics.
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The pilot of the Caribbean
Barbados-based Bitt already has experience in providing technical services for CBDCs. In 2019, it was tasked by the Eastern Caribbean Central Bank (ECCB) to conduct a blockchain-issued central bank digital currency (CBDC) pilot within the Eastern Caribbean Currency Union (ECCU).
This pilot was successful and in April, the ECCB launched the CBDC, otherwise known as DCash, the first such project to get off the ground in a currency union, according to Bitt’s website.
Speaking at the currencies virtual launch of the Caribbean, Bitt’s chief executive Brian Popelka, said, “CBDCs are truly transforming the way that financial transactions are conducted around the world. This change brings significant benefits, especially to emerging economies. DCash is a game-changer for the people of the Eastern Caribbean.”
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Read more: Thailand to pilot digital currency for consumers next year
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