The Central Bank of Nigeria (CBN) has stated that the country’s Central Bank Digital Currency (CBDC), the eNaira, is a threat to the nation’s financial stability.
The apex bank’s Director of Corporate Communications, Isa AbdulMumin, made the clarification in a statement on Monday, in response to claims to the effect that the eNaira was bringing about instability in the economy.
eNaira, was launched in October 2021 as one of the country’s initiatives to drive financial inclusion and boost the cashless policy of the CBN.
He described the claim as a misunderstanding of the bank’s recently released publication, ‘Economics of Digital Currencies: A Book of Readings’, pointing out that there was no concern whatsoever about the eNaira constituting a risk to the nation’s financial stability but rather driving financial inclusion.
“The attention of the Central Bank of Nigeria (CBN) has been drawn to news items on some media platforms –traditional and social – suggesting that the country’s Central Bank Digital Currency (CBDC), the naira, is a threat to the nation’s financial stability.
“After reviewing the reports, which appear to have been syndicated, there seems to be a lack of understanding of portions of the Foreword, and some articles, in the bank’s recently released Economics of Digital Currencies: A Book of Readings.
“A recurring theme in the book is the interest of regulators, such as the CBN, in the role of cryptocurrencies as speculative investments, and the potential threat they harbor for financial stability. Under that, the articles in the book provide an in-depth understanding of CBDCS generally and the workings of the naira in particular, highlighting issues and challenges in implementation and adoption.
“One of the media reports speaks of “concerns about Nigeria’s central bank digital currency, naira, indicating potential risks to financial stability despite its success in narrowing the country’s financial inclusion gap.” The nexus implied is unconvincing. In the ordinary course of things, the CBN does not join issues on news commentary; however, we are constrained to clarify the reports to ensure that misunderstandings are not fostered,” the statement indicated.
AbdulMumin added that the entire structure has continued to evolve and undergo modifications targeted at improving the user experience across all interfaces. He, therefore, urged Nigerians to embrace the technology for, amongst other things, greater financial inclusion.