Economic experts in Nigeria have told the Central Bank of Nigeria (CBN) and other authorities that the bank can not deliver a Central Bank Digital Currency to its people by 2022 as it promised previously.
The expert told local media that the CBN’s plan to float a CBDC by 2022 is unrealistic.
Barely two weeks ago, the CBN announced that it will be launching a Central Bank Digital Currency (CBDC) before the end of 2021.
The announcement was made by Director, Information Technology Department, Central Bank of Nigeria (CBN), Mrs. Rakiyat Mohammed. She made the announcement at the banker’s committee meeting.
She said, “As I said, before the end of the year, the Central Bank will be making special announcements and possibly launching a pilot scheme in order to be able to provide this kind of currency to its populace.”
The director made mention of the fact that about 80 percent of central banks in the world are looking into the possibility of issuing a central bank digital currency and Nigeria cannot be left behind. She also mentioned that the CBN had been exploring technology and had made tremendous progress for 2 years, so far.
Expert gives reason Nigeria can’t achieve CBDC by December
In an interview, economist and the Chairman, Chartered Institute of Bankers of Nigeria, Abuja Branch, Prof. Uche Uwaleke, said that the level of the country’s economic development among other financial concerns makes the launch of a CBN digital currency before the end of the year unfeasible.
Uwaleke expressed concerns regarding the likely impact on monetary policy transmission, financial stability, inflation as well as the role of financial institutions and economic development in the country.
He states that these reasons make the timeframe unrealistic for a CBDC before December.
The Professor added that central banks of more developed economies such as the US Fed Reserve and the European Central Bank were still researching the implications of introducing a CBDC.
He, therefore, advised the CBN not to be in a hurry and to commit resources to research in the area of digital currencies including possible mechanisms for controlling private virtual currencies such as cryptocurrencies.