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Nigeria’s Central Bank Launches Digital Currency October 1st

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Nigeria’s Central Bank, CBN, has said that it would launch its digital currency in three months’ time.

In a Webinar session yesterday, the bank revealed to stakeholders that the digital currency is set for launch on October 1st.

Remember that Nigeria usually commemorates her independence every 1st of October.

So, unveiling the digital currency on Independence Day celebration would be a news most Nigerians would welcome happily.

CBN’s Director of Information Technology, Rakiya Mohammed, said the bank code-named the initiative, project GIANT.

She had earlier revealed that CBN will make an official announcement of the launch in a later date.

She had said, Before the end of the year, the Central Bank will be making a special announcement and possibly launching a pilot scheme in order to be able to provide this kind of currency to the populace.

According to Mohammed, project GIANT is based on Hyperledger Fabric Blockchain.

What is Hyperledger Fabric Blockchain?

Hyperledger “is an open source community focused on developing a suite of unbreakable frameworks, tools and libraries for blockchain deployments.

Blockchain itself is a form of database that stores a collection of information in blocks and connected together with chains.

The information can be in forms of products, services or applications.

So, Hyperledger forms the foundation for open source development of blockchain-based products, solutions, and applications using plug-and-play components.

The CBN, just like many other apex banks in the world, has adopted the Hyperledger open source for its digital currency.

ALSO READ: What CBN’s Ban On Cryptocurrency Means For The Struggling Nigerian Economy

Acknowledging this, Hyperledger said, “CBDC and other payment projects are moving quickly from prototypes to pilots and beyond with some well-known projects already in production.”

It said “As CBDCs and other cross border payment use cases mature, central banks continue to partner with the private sector from small to big companies to accelerate and innovate, and the Hyperledger open source community is at the forefront of the most public CBDC projects.”

Last month, the Nigeria’s apex bank hinted that it would be launching the digital currency before the end of 2021.

CBN Governor, Godwin Emefiele had noted during the 306th Banker’s Committee meeting that the bank was researching on Digital currency.

Similarly, the Director of IT added that CBN had been conducting research on digital currency since 2017.

The director said that bank will likely conduct a proof of the digital currency’s concept before the end of 2021.

Nigeria ’s earlier ban on Digital Currency like Cryptocurrency:

Recall that the central bank of Nigeria had banned cryptocurrency transactions in the country.

It had, in February, ordered all banks in Nigeria to close any accounts linked to crypto transactions.

The ban followed the influx of many Nigerians increasingly accepting and investing hugely in digital currencies.

The regulator, however, gave reasons for the ban to include cryptocurrency’s alleged risks to investors such as loss of investments.

CBN also alerted that Cryptocurrency facilitated the financing of terrorism, corruption and aiding ransom taking by criminals and money laundering.

Need for Nigeria’s CBN digital currency:

However, to further boost the power of the Naira, the CBN said it saw the need to launch its digital currency.

The CBN said it discovered that many apex banks of world countries are adopting digital currencies.

The bank noted that Nigeria won’t be caught unawares on this development.

The bank’s IT Director said, “The plan to launch a digital currency is for Nigeria to join the league of other nations like China. It is going to help us accentuate the financial inclusion strategy that we are behind schedule at only 60 per cent.”

Explaining further, Mohammed said its digital currency will complement the Naira currency.

The Director of IT noted that Nigeria’s digital currency, when functional, will help manage and grow Nigeria’s macro businesses.

She also said that the digital currency will facilitate financial inclusion and cross border trade.

Other benefits of the currency would be to make remittance travels from abroad to Nigeria easier.

It will also improve Nigeria’s monetary policy, payment systems, tax collections and other social interventions.

“It is going to simplify payments, as well as reduce the cost of international payments,” she had said.

Mohammed assured that CBN has considered the architecture, accessibility and privacy of the currency before adopting it.

Nigeria’s CBN’s Digital Cards:

CBN also revealed that it would launch its digital smart cards for the digital currency.

Expectedly, CBN digital cards will work with the digital currency.

What CBN’s Digital Currency means for you:

Nigerians will be able to digitally invest and trade with the rest of the world with the digital Naira.

However, the digital currency has to gain greater and global acceptance for Nigerians to get the full benefits.

The currency has to also meet certain privacy and security criteria to gain the trust of the users.

Also, with the digital currency, Nigerians who already have digital currencies may have a window to keep maintaining their digital trade powered by digital currencies.

Moreover, If Nigeria’s CBN finally launches the currency, it would place the country as the first to have such initiative in Africa.

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