The plan by the Central Bank of Nigeria to launch a digital currency in the country has been described by experts as a welcome development.
The CBN Governor, Mr Godwin Emefiele, disclosed last week that digital currency would be introduced in the country.
“We are committed in the CBN and I can assure everybody that digital currency will come to life even in Nigeria.”
The Head of Economics Department, Pan-Atlantic University Lagos, Dr Olalekan Aworinde, said, “When you have a digital currency in place, the implication is we would use less of the naira, particularly because of improved financial transactions. If people do not demand the naira, its value is likely to reduce.
“Also, if we adopt a digital currency, it will affect the total money in circulation. A narrow money supply occurs. When the demand for the naira is more than its supply, the value of the naira would rise. But inflation is not our friend, it is on the increase all the time. So, we cannot easily gauge if the value of the naira would improve because of this.”
He added that if the CBN were to float a digital currency, it would be a step in the right direction.
Aworinde said, “When ATMs were first introduced, it was met with great scepticism. But now, nearly every household has an ATM card. People do not carry as much cash as they used to before. It also created jobs for some people. Although for this to be seamless, the government will have to increase its investment in cybersecurity.”
A financial planning expert, Mr Kalu Aja, said floating a digital currency could help boost remittances into the country.
“A central bank’s digital coin is a stable coin, which means it is backed by dollar reserves. If the CBN allows Nigerians offshore to remit using a CBN stable coin, it will create a vibrant secondary market for digital naira,” he said.
When asked if Nigeria was ready for a digital currency he said, “Yes Nigeria is ready. The Nigerian bank payment system is amongst the best in the world.”
The Chief Executive Officer of KoinWa, a cryptocurrency platform, Hakeem Disu, believes this move would strengthen the naira and revolutionise the country’s financial industry.
He said, “Digital currency is basically about strength in numbers. Nigeria just needs to position itself in the cryptocurrency space ahead of other countries, considering the fact that the nation is the second-largest bitcoin hub in the world, according to data from last year.
“And another thing is CBN needs to work with the people already in the space, especially the ones in exchanges as they are well-grounded in blockchain technology. It is an extraordinary move that might help banking cut down on operational costs.”