Nigerian Lenders Frustrating CBDC’s Adoption — Central Bank Governor – Emerging Markets Bitcoin News

Apathetic Nigerian lenders are frustrating the e-naira’s adoption because they are worried this could deprive them of a key revenue source, Godwin Emefiele, the Central Bank of Nigeria (CBN) governor, has said. Emefiele stated that the central bank was working to create a way for Nigerians who do not have bank accounts to access e-naira wallets.

E-Naira Undercuts Lenders’ Investment in Mobile Banking Infrastructure

Godwin Emefiele (Nigeria’s central bank governor) has criticised some lenders for preventing the Nigerian adoption of the digital currency e-naira. According to Emefiele, lenders are not prioritizing the promotion of the central bank’s digital currency because they fear this could deprive them of revenue earned from normal banking services.

Explaining the reasons behind the lenders’ reluctance, a Bloomberg report said e-naira transactions do not attract charges while the deposits are not regarded as cash in the lenders’ books. In addition, the digital currency e-naira is believed to reduce mobile banking investments made by lenders as part of efforts to increase their fee and commission income.

Lender ‘Apathy’

After describing the lenders’ unwillingness to promote the use of the central bank digital currency (CBDC) as an “apathy” Emefiele revealed the Central Bank of Nigeria is about to conclude tests on a channel that enables Nigerians without bank accounts to open e-naira wallets. This channel is being developed by the central bank in collaboration with MTN, a mobile operator.

CBN reports that only 700,000 digital currencies have been downloaded in the four years since launch. The reason is that only account holders are allowed to open an enaira wallet.

Meanwhile, following the central bank’s monetary policy committee meeting which ran for two days, the CBN reportedly resolved to increase the monetary policy rate (MPR) to 14%. Emefiele said that the rate increase was a matter of concern.

We will tighten our belts if inflation keeps rising at the same rate. [the]We are currently looking into other ways to slow down inflation as well as food prices. We will continue to monitor the situation if it does not occur. [MPC]It is impossible to guarantee that rate increases will cease.

The committee, however, resolved to “retain the asymmetric corridor at +100/-700 basis points around the MPR.” The liquidity ratio also is unchanged at 30%.

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Terence Zimwara

Terence Zimwara, a Zimbabwean journalist, writer and author who has been awarded the Zimbabwe Booker Prize. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.