By CHINEDU ASADU, Associated Press
LAGOS, Nigeria (AP) – Nigeria has launched a digital currency which, according to the Central Bank of Nigeria, is “a big step forward in the evolution of currency” in Africa’s most populous country.
President Muhammadu Buhari said at the launch on Monday that the digital currency and the blockchain technology it uses can drive economic growth and increase the GDP of Nigeria’s economy, one of the largest in Africa, by $ 29 billion. dollars over the next 10 years.
The use of the Nigerian central bank’s digital currency “can help move many more people and businesses from the informal sector to the formal sector, thereby increasing the country’s tax base,” Buhari said, eight months later. that the West African nation has started a crackdown on cryptocurrencies.
The eNaira – whose currency is “The same naira, more possibilities” – is the equivalent of the paper naira of Nigeria and is regulated as an official tender by the Central Bank of Nigeria. Experts see the launch as a big step towards a cashless Nigerian society and rapid growth of the digital economy which has been a priority for the Nigerian Apex Bank since 2012.
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“The eNaira is a major step forward for Nigeria,” said Andrew Nevin, chief economist at PricewaterhouseCoopers Nigeria. “It’s a much simpler payment mechanism and… will help in many areas, including reducing the amount of money used and the cost of transactions.”
The central bank said the launch of digital currency is “an important step on a long journey … eNaira enables households and businesses to make payments fast, efficient and reliable, while benefiting from a system resilient, innovative, inclusive and competitive payments, ”the bank said in a policy document viewed by The Associated Press.
The central bank also hopes that the digital currency will encourage financial inclusion in the country of more than 200 million people. Only 45% of Nigeria’s 106 million adults have bank accounts in 2020, according to Enhancing Financial Innovation & Access, a Lagos-based financial sector development organization.
Authorities are optimistic that eNaira will also boost digital transactions which have grown rapidly in Nigeria over the years. In 2020, the country had recorded 2.7 billion transactions valued at 162.9 trillion naira ($ 396 billion), according to the central bank.
The initiative will also make it “much easier to transfer value,” especially for low value transactions, Nevin told AP. “Fintechs, banks and other financial players relying on eNaira will create more and more useful products and services and the positive economic impact will accumulate,” he said.
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