Two sources familiar with the matter said that the central bank is willing to develop its own software for the CBDC in order to keep full control of the effort.
It’s been nearly eighteen months since Nigeria launched its central bank digital currency (CBDC) eNaira back in October 2021. Now, the Central Bank of Nigeria is planning for a tech revamp of its CBDC.
Currently, Nigeria’s central bank is in talks with potential technology partners who can develop a system to run and manage their CBDC. Two sources familiar with the matter said that the central bank is willing to develop its own software for the CBDC in order to keep full control of the effort.
One of the sources also stated that the central bank is in early-stage talks with New York-based technology firm R3. Initially, Bitt Inc. help Nigeria to issue its central bank digital currency making it the first country in the African continent to deploy a CBDC.
The source said that the new partner doesn’t seek to take away the job from Bitt Inc. Instead, it would help the central bank to meet its goal of controlling the CBDC technology. Commenting on the development, Bitt Inc. noted that it “is aware that our partner, the CBN, works with various service providers to explore technical innovations for their digital infrastructure”. The company further explained that it is working closely with the Nigerian central bank in developing “additional features and enhancements”.
Nigeria Struggles to Push eNaira CBDC Adoption
Although Nigeria has been at the forefront of initiatives in supporting the blockchain-based versions of its national currency, it has struggled to push the wide adoption of its CBDC e-Naira. Currently in Nigeria, only one million people out of the total 200 million population have downloaded digital wallets to store eNaira.
The Nigerian Central Bank itself stated that the transaction volumes for eNaira have been negligible. Now, with the e-Naira redesign and the cashless policy introduced four months back, the regulator is looking to boost the adoption of the CBDC.
Nigeria has been facing severe economic challenges recently in the central bank’s effort to move to a cashless economy. Central Bank of Nigeria’s move to demonetize high-value notes to mop up excess cash has in fact backfired with individuals and small businesses facing the most heat.
Critics of CBDCs have raised concerns that they could destabilize commercial bans and would exclude those consumers and businesses still relying on cash.
Bhushan is a FinTech enthusiast and holds a good flair in understanding financial markets. His interest in economics and finance draw his attention towards the new emerging Blockchain Technology and Cryptocurrency markets. He is continuously in a learning process and keeps himself motivated by sharing his acquired knowledge. In free time he reads thriller fictions novels and sometimes explore his culinary skills.