Despite the removal of the former governor almost two months ago, the Central Bank of Nigeria (CBN) remains committed to his central bank digital currency (CBDC) project, without showing any indication of abandoning it.
According to a report by local news outlet The Sun, the central bank recently improved the CBDC mobile application by incorporating Near Field Communication (NFC) technology. This upgrade enables mobile devices and payment terminals to interact when in close proximity, facilitating convenient and contactless eNaira payments.
Despite earlier versions incorporating QR codes, CBN reportedly emphasizes that the latest addition of NFC technology will play a crucial role in increasing CBDC adoption rates. Joseph Angaye, deputy head of CBN's risk management department, revealed that the banking regulator is committed to using innovative technology to improve the user experience.
Embracing the idea of โโusing cutting-edge technology, Angaye reportedly revealed that the CBDC will be equipped with programming features. He explained that these programmability features could be used to limit CBDC payments exclusively to designated government programs, effectively reducing the risk of fraud.
In further explanation, Angaye reportedly emphasized that the CBDC's programmability allows for the allocation of specific funds to farmers, allowing for specific purposes such as tool acquisition. By implementing this approach, funds transferred to your eNaira wallet become non-divertable for unrelated purposes, ensuring that their intended use is strictly adhered to.
The deputy director reportedly highlighted numerous advantages of CBDCs for retail users in the country, such as mitigating settlement risks and enabling fast transaction processing. Angaye emphasized that eNaira aims to address the issue of financial inclusion and Nigeria's pioneering role in CBDC adoption provides valuable information for various economic players and entities to learn from the country's experience.
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Nigeria launched its eNaira in 2021 be part of an exclusive group of countries with a CBDC offer. However, adoption rates have fallen below expectations, prompting the central bank to explore various options to drive usage.
The central bank implemented use cases in the transportation sectors while including USSD functionality in the offering. With adoption rates still low, former CBN Governor Godwin Emefiele blamed commercial banks for stifling eNaira's growth in favor of profitability.
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