Some analysts have acknowledged that the E-Naira will improve the entire financial landscape in the long run, even as it will deepen financial inclusion in the country.
The e-naira is a type of central bank digital currency (CBDC) which over 80 per cent of central banks across the world are currently exploring. CBDC’s are new variants of a central bank’s money that are different from physical cash and reserves/settlement accounts.
Founder/chief Gboza at Gboza Gbosa Technology Limited, Ade Atobatele, said digital currencies are just like cash that are just digitalised. Not to be confused with cryptocurrencies, he said “the only thing they have in common is that they are digital. The CBN’s primary mandate is monitoring interest rates and monetary policies.
“CBDC can be a tool to help CBN control the money supply M2, the M2 money supply. The beauty of CBN is that they are a licencing authority which means they can licence people for different things, they can call upon them to do their bidding whenever they want.”
Chief executive of eMaginatons Limited, Sola Fanawopo, said with the eNaira, it will be easier for banks as well as the government to track spending as a way of increasing credit particularly for small and micro businesses.
“The e-Naira will help SMEs because their transactions can now be tracked. Unlike now where loss of their transactions are physical, e-Naira transactions become digital and traceable.
trace how businesses spend the money that they lend them, how then can they give them credit? But with this, banks will know how the money is being spent and they will be able to give even more credit.
“However, there is need to build a strong identity system because a digital currency needs a strong identity management system. Also, fraud will move from physical to digital because thieves will always follow the money.
“We must build a strong cyber security system and I hope this will make banks invest more in protecting customers from fraud. Right now banks are not liable when there is fraud on an account which is not the case in other climes.
“If banks are made liable for fraud, they will do their best to make sure that customer’s monies are not stolen. They will deploy all necessary means against phishing and all sorts of cybercrimes in the industry.
“With the e-Naira, I believe that more should be done to protect the customers so as to increase their confidence in the system,” Fanawopo advised.
Fanawopo also noted that the eNaira will serve as a veritable tool for the government to monitor financing of terrorism in the country, adding “there will be no hiding space for anybody and the government will be able to trace proceeds of crime and monies used to sponsor terrorism in the country.”
Earlier, CBN director, Rakiyat Mohammed, had noted that the CBDC would be a tool in addressing the financial inclusion challenge of the county. “Our target for this year was to achieve 80 per cent of financial inclusion and we are at about 60 per cent now and at the rate that we are going, we are not likely to meet this target.
“The CBDC will accelerate our ability to meet this target because regardless of where you are just like the fiat cash anyone including my grandmother in the village will be able to have CBDC and use, and she will be able to buy anything in Ghana or South Africa or USA without having to transfer cash and at a very reduced cost. So it will reduce the cost of transferring money. In order to complement the federal government’s effort in achieving a digital economy,” she stressed.