The Central Bank of Nigeria (CBN) has said that transactions will be cheaper to conduct with Nigeria’s digital currency, e-naira.
The Governor, Godwin Emefiele, spoke in Abuja at the end of the bi-monthly Monetary Policy Committee (MPC) meeting.
He said: “Our digital currency which is tagged e-naira will certainly come into operation in October and we are working very hard for this.
“We believe transactions will be cheaper and more efficient as there will be less conflict.”
He said the economy is going digital and “cash cannot play in that space,” adding that “e-naira which will represent the digital equivalent of cash will be used as fiat currency for transactions”.
On how the e-naira will work, Emefiele said: “If you choose to convert some of the naira in your account to e-wallet or digital currency, we will support that.
“When this starts the CBN will move some of the balances in CBN to those banks into digital currency. You go to your bank, you decide to move N2 million from the N10 million you have in your account to digital currency they will debit your account and move it into your e-wallet.
“Then you have N2 million digital currency which you can spend across countries”.
He noted that “the use of cash is declining all over the world,” noting that “with the advent of digital currency, more and more people are adopting the use of electronic money to facilitate little commerce”.
He said cryptocurrencies are private monies that are not regulated, therefore using them is a personal decision.
“if you decide to use them, it means you are taking your risk. If you make your money, we will wish you good luck but if you lose your money, we will laugh at you,” he said.
At the end of the MPC meeting, members of the Committee decided by a unanimous vote to retain the Monetary Policy Rate (MPR) at 11.5 per cent; retain the asymmetric corridor of +100/-700 basis points around the MPR; retain the CRR at 27.5 per cent, and retain the Liquidity Ratio at 30 per cent.
Emefiele said: “The MPC was delighted that inflation had begun to trend downwards, while output growth had remained positive.
“The Committee, however, was of the opinion that there was a need to continue to put in place policy measures that will further and faster drive down inflation, while at the same time accelerate output growth to levels above population growth rate”.
MPC, he said, believes “that there is the need to continue to use its tools that had been adopted so far, even in a more aggressive manner.”
“The MPC, therefore, encourages the CBN to continue using its existing administrative methods to rein in inflation by the use of its discretionary Cash Reserve Ratio (CRR) policy to mop-up liquidity from the banking system as the need arises,” Emefiele said.