The Central Bank’s Commitment to CBDC
The Central Bank of Nigeria (CBN) remains dedicated to its central bank digital currency (CBDC) project, even after the former governor’s ousting nearly two months ago. The CBN shows no signs of abandoning the eNaira project and continues to work towards enhancing its adoption rates.
NFC Technology Boosts eNaira Payments
According to a report by local news outlet The Sun, the central bank recently integrated Near Field Communication (NFC) technology into the CBDC mobile app. This NFC upgrade allows mobile devices and payment terminals to interact in close proximity, facilitating convenient and contactless eNaira payments.
While previous versions incorporated QR codes, the CBN is now placing emphasis on the latest addition of NFC technology to boost the adoption rates for the CBDC. Joseph Angaye, the deputy director of the CBN’s risk management department, stated that the banking regulator is committed to utilizing innovative technology to enhance user experience.
Programmability Features for Enhanced Security
Angaye also revealed that the eNaira will be equipped with programmability features to enhance security. These programmability features will enable targeted fund allocation to designated government programs, reducing the risk of fraud. For instance, funds transferred into an eNaira wallet for farmers can be used exclusively for specific purposes like tool acquisition, ensuring the intended use is strictly adhered to.
Advantages of CBDCs for Retail Users
Angaye highlighted several advantages of CBDCs for retail users in Nigeria. These advantages include mitigating settlement risks and enabling rapid transaction processing. The eNaira aims to address the issue of financial inclusion, and Nigeria’s pioneering role in adopting CBDCs provides valuable insights for various economic players and entities to learn from the country’s experience.
Boosting Adoption Rates
Nigeria launched its eNaira in 2021, joining an exclusive group of countries with a CBDC offering. However, adoption rates have fallen below expectations, prompting the central bank to explore several options to drive usage.
The central bank has rolled out use cases in the transport sectors while also including USSD functionality in the offering. Despite this, former CBN Governor Godwin Emefiele blamed commercial banks for stifling eNaira’s growth in favor of their profitability.
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