Stakeholders proffer options for digital currency success in Nigeria
Stakeholders including the Lagos Chamber of Commerce and Industry (LCCI) and Prof. Lauren Cohen, L. E Simmons, a Professor of Business Administration, Harvard Business School, United States of America, among others, yesterday, listed recommendations for the success of Nigeria’s Central Bank Digital Currency (CBDC).
They spoke at a symposium organised by the LCCI Financial Services Group that was held both physical and virtual.
Themed “Blockchain Technology, Cryptocurrencies and Central Bank Digital Currencies: Implications for the Global Financial Landscape”, Cohen tasked the Central Bank of Nigeria (CBN) to pitch the unique value of the digital currency to ensure its dominance over other decentralized financing system to engender its success.
The Harvard professor said that the goals, factors to engender success, achievable internal landmarks and when to declare victory of the CBDC needed to be considered and set in place.
He listed the positive economic implications of the CBDC to be easier, cheaper and more fluid, more efficient and effective transactions, better enforcement and monitoring of contract and tax payments and greater financial inclusion.
He, however, noted that the matter of privacy was a big knock on the CBDC that needed to be dealt with.
“For it to be successful, a network group must be created to increase the breadth and depth of adoption to make it more valuable.
“The CBN must be lauded for rolling out the CBDC in the way they did but more needs to be done to ensure it robustly takes over the decentralized finance system.
“It is the beginning of how fintech should be embraced to create value as an engine that fuels the dynamic landscape to look for path-breaking fintech innovations that are yet to come.
“However, the landmarks must be time, adoption, motor and inclusion sensitive, with definite timelines,” he said.
Chief Sparkler, Sparkle Nigeria, Uzoma Dozie, said that the government, as a big player in the CBDC, would engender a ripple effect of success and facilitate the move to cashless and more digitized financial country.
He noted that the CBDC would increase digital liquidity, and help the government pay social funds directly to beneficiaries.
“However, there’s need to scale up infrastructure such as mobile devices, data availability to drive e-currency adoption across the country,” he said.
President, LCCI, Mrs Toki Mabogunje, quoted a Chainalysis report that states that Nigeria currently has the 8th highest cryptocurrency adoption in the world.
Mabogunje, represented by Mr Abimbola Olashore, Treasurer, LCCI, said that opportunities in blockchain technology and digital currency could potentially add up to US$29 billion to Nigeria Gross Domestic Product (GDP) by the year 2030.
Mabogunje said that in recognition of these abundant opportunities, the Nigeria government was making concerted efforts to broaden policies and regulatory landscape to ensure that benefits of digital financial innovations do not elude the country.
“We laud the Central Bank of Nigeria (CBN) bold moves to develop digital currency codenamed “eNaira”, with Nigeria becoming the first country in the continent and one of the earliest around the world to introduce centrally backed digital currency.
“This reinforces the readiness of the Nigeria government to harness the potential of the technology ecosystem to drive economic growth and development through facilitated informal and formal sectors.
“The LCCI enjoins relevant MDAs and regulatory authorities responsible for designing and implementing technology, innovations and investment policies to effectively coordinate their activities.
“This is to develop a harmonized blueprint that will create a level playing field for both private and public players in the cryptocurrency ecosystem.
“Regulations on blockchain technology and digital currency must be dynamic, robust, inclusive, responsive, globally competitive and fit for Nigeria’s context.
“This will give fillip to the tech savvy youth to innovate and spur confidence of investors and encourage significant investment in the blockchain ecosystem,” she said.
Chairman, Financial Services Group, LCCI, Obinna Anyanwu, said that the COVID-19 pandemic underscored the importance of digitized financial systems as imperatives for developing economies like Nigeria, to integrate more effectively into the global supply chain.
He said that the use of blockchain technology to create virtual money or digital currency and in managing payments, financial flows and transactions had witnessed increasing trends.
“We are of the firm belief that the Central Bank Digital Currency (CBDC) recently launched by the apex bank could complement the current areas of payment options, thereby ensuring the stability of the payment system in the long run.
“That is why we are here today to deepen the conversation generally on opportunities of blockchain technology and innovations and specifically on how the recently released regulatory guidelines on the e-Naira will drive digital financial transformation in Nigeria,” he said.