The Central Bank of Nigeria (CBN) remains committed to its central bank digital currency (CBDC) project, despite the former governor being ousted nearly two months ago, and is showing no signs of letting up.
According to a report in local news outlet The Sun, the central bank recently enhanced the CBDC mobile app by including Near Field Communication (NFC) technology. The upgrade enables mobile devices and payment terminals to interact in close proximity, thereby facilitating convenient and contactless e-Naira payments.
Despite previous versions including QR codes, CBN reportedly emphasizes that the latest addition of NFC technology will play a key role in boosting the adoption rate for CBDCs. Joseph Angay, deputy director of the risk management department of CBN, reportedly revealed that the banking regulator is committed to using innovative technology to enhance the user experience.
Embracing the idea of using cutting-edge technology, Angay reportedly revealed that the CBDC will be equipped with programmability features. He explained that these programmability features could limit CBDC payments to specifically designated government programs, thereby reducing the risk of fraud.
In further explanation, Angay reportedly emphasized that the programmability of CBDCs allows for targeted allocation of funds to farmers, thereby enabling specific objectives such as equipment acquisition. By implementing this approach, the funds transferred to their eNaira wallet become non-divertible for any unrelated purpose, thereby ensuring that the intended use is strictly adhered to.
According to the report, Angaye highlighted several benefits of CBDCs for retail users in the country, such as reducing settlement risks and enabling faster transaction processing. He emphasized that eNaira aims to address the issue of financial inclusion, and that Nigeria’s pioneering role in CBDC adoption provides valuable insights for various economic players and institutions to learn from the country’s experience.
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Nigeria launches its Enayara in 2021 to become part of an exclusive group of countries offering CBDCs. However, adoption rates have been lower than expected, prompting the central bank to explore several options to increase usage.
The central bank initiated use cases in the transportation sectors by including USSD functionality in the offering. With the low adoption rate, former CBN governor Godwin Emefile blamed commercial banks for stalling Enayara’s development in favor of its profitability.
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