Reduced transaction cost expected as CBN to launch digital currency

Nigerians would begin to enjoy reduced cost of transaction and cash management as the Central Bank of Nigeria (CBN) is finalising plans to roll out its own digital currency before the end of the year, as it seeks ways to regulate the virtual currency space in the country.

CBN director of information technology, Rukiyat Mohammed, announced this at the end of the virtual Bankers’ Committee meeting held on Thursday.

The CBN had in February, placed restrictions on cryptocurrencies, directing banks not to use, hold, trade and/or transact in cryptocurrencies, citing risks in the inability to regulate the highly volatile market.

“Before the end of the year, the central bank will be making an announcement and possibly launching a pilot scheme to be able to provide this kind of currency,” Mohammed explained.

She further explained that other digital currencies like bitcoin and cryptocurrency are not under the control of the CBN, and are, therefore, personal decisions which individuals make.

“We have spent over two years studying this concept of central bank digital currency and yes, there are risks that we have identified and that is one of the reasons I said we are setting up a central governance structure that will involve al industry stakeholders to look at some of these risks even as we continue on our journey.

“Very soon, we will make an announcement as regards the date or if we will launch this, but yes, by the end of this year, we should be able to have something for the currency.

On whether the other digital currencies will be used alongside the planned CBN digital currency, the director explained that “cryptocurrencies are not under the control of CBN. People are still transacting in cryptocurrency on their own and nobody has stopped them, but whether they will work alongside, these are some of the decisions that have to be taken as we progress into this journey.”