Despite the former governor’s ousting nearly two months ago, the Central Bank of Nigeria (CBN) continues to display a commitment to its central bank digital currency (CBDC) project, showing no indications of abandoning it.
According to a report by local news outlet The Sun, the central bank recently enhanced the CBDC mobile app 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 previous versions incorporating QR codes, the CBN reportedly emphasizes that the latest addition of NFC technology will play a crucial role in boosting the adoption rates for the CBDC. Joseph Angaye, the deputy director of the CBN’s risk management department, reportedly revealed that the banking regulator is committed to utilizing innovative technology to enhance user experience.
Embracing the idea of utilizing cutting-edge technology, Angaye reportedly revealed that the CBDC will be equipped with programmability features. He explained that these programmability features could be employed 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 targeted fund allocation to farmers, enabling specific purposes such as tool acquisition. By implementing this approach, the funds transferred into their eNaira wallet become non-divertible for any unrelated purposes, ensuring that the intended use is strictly adhered to.
As per reports, the deputy director highlighted numerous advantages of CBDCs for retail users in the country, such as mitigating settlement risks and enabling rapid transaction processing. Angaye emphasized that the eNaira aims to address the issue of financial inclusion and Nigeria’s pioneering role in adopting CBDCs provides valuable insights for various economic players and entities to learn from the country’s experience.
Nigeria launched its eNaira in 2021 to be part of an exclusive group of countries with a CBDC offering. However, adoption rates have fallen below expectations, prompting the central bank to explore several options to drive usage.
The central bank rolled out use cases in the transport 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 their profitability.