TECHDIGEST – The Central Bank of Nigeria (CBN) has launched the Tertiary Institutions Entrepreneurship Scheme (TIES), to provide access to finance bankable ideas by graduates and undergraduates, in the quest to tackle youth unemployment in the country.

The Scheme was developed in partnership with Nigerian polytechnics and universities, is designed to harness the potentials of graduate entrepreneurs by creating a paradigm shift from the pursuit of white-collar jobs to a culture of entrepreneurship for economic development and job creation.

Speaking at the event, in Abuja, CBN Governor, Mr. Godwin Emefiele, vows to tackle youth unemployment and underemployment in the country.

He said, “With about 600,000 students graduating yearly from Nigerian tertiary institutions, and without the commensurate employment opportunities in both the public and private sectors, it has become imperative that government, at all levels, puts in place policy measures to support entrepreneurial development among our youth.

“Such measures would create an enabling business ecosystem that supports innovation and enables the youth to unleash their entrepreneurial potential, by redirecting their focus from seeking white-collar jobs to a culture of entrepreneurship development.

“The ecosystem should provide support in re-orientating, training, and providing a financing model apt to the peculiarity of the sector within which the businesses operate.”

Mr. Emefiele described entrepreneurship as an integral part of any economy, and that “entrepreneurs play a key role in driving growth and innovation, which in turn results in job creation.”

The TIES, he explained would create an ecosystem that allowed the flow of affordable credit to the real sectors of the economy.

He added, “With an estimated population of 213 million, out of which two-third are youth, aged under 35 years, the nation is faced with a historic opportunity, particularly as the demography continues to create clear evidence of their relevance to economic development, as accentuated by the global recognition of Nigerian tech start-ups and continued growth of businesses in the technology space owned by the youth.

“In realization of this, the CBN has introduced several innovative financing programs designed to extend low-cost financing to youth entrepreneurs across the country. These interventions have continued to receive resounding commendations, as they have proven effective in extending credit to youth entrepreneurs across the country.

“For instance, under its Targeted Credit Facility (TCF), the Bank has disbursed a total of ₦363.49 billion to 766,719 beneficiaries, comprising 638,070 households and 128, 649 small businesses. Under its Agribusiness Small and Medium Enterprise Investment Scheme (AGSMEIS), the Bank has released ₦134.63 billion to 37,571 entrepreneurs. Disbursements under the NYIF stood at ₦3.00 billion to 7,057 small business beneficiaries.”

The scheme consisted of three segments: The Term Loan Component; The Equity Investment Component; The Developmental Grant Component.

The loan component provides direct credit opportunities to graduates of Nigerian polytechnics and universities of not more than seven years post-graduation.

An applicant, if successful, is eligible for a maximum of ₦5 million for an individual, sole-proprietorship or small company; and a maximum of ₦25 million for a partnership or company. The tenor for the facility is maximum of five (5) years, with a one-year moratorium, and at an interest of 5 per cent per annum, which shall revert to 9 per cent from March 2022.

Mr. Abubakar Suleiman of Sterling Bank heads a Body of Experts which was inaugurated to access the proposals by applicants.

The Secretary to the Government of the Federation (SGF), Mr. Boss Mustapha, in a message noted that entrepreneurship was the way to go for Nigeria youths, given that there were not enough jobs in both public and private institutions for all graduates.

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TECHDIGEST – The Central Bank of Nigeria’s eNaira website has gone live ahead of October 1 official launch.

According to the website, www.enaira.com, “e-Naira is a CB -issued digital currency that provides a unique form of money denominated in Naira.”

The CBN stated that e-Naira would serve as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments.

It added that e-Naira had an exclusive operational structure that was both remarkable and nothing like other forms of central bank money.

“There are several benefits from a central bank-issued digital currency in Nigeria, and this cuts across different sectors of, and concerns of the economy,” it stated.

According to the CBN, the e-Naira app would feature and reflect brand values centered around ease of use and efficiency while bearing in mind security.

“We have developed this App with a deeper understanding of customers, what they value, their abilities and also their limitations,” it stated.

The website explained that customers would be able to move money from their bank account to their e-Naira wallet with ease; monitor their e-Naira wallet, check balances and view transaction history; make in-store payment using their e-Naira wallet by scanning QR codes; and send money to one another through a linked bank account or card.

It stated that the e-Naira was crafted with interesting elements for modern solutions that paid keen attention to details.

According to the website, the Nigerian digital currency that would be issued and regulated by the CBN had benefits which included fast, cheap, reliable and available payment channel; supports digital economy; improved economic activities; and simplified and easy cross border payments and trade.

It also said it would ensure inclusion of excluded people in the financial system; improved effectiveness of monetary policies; ease in tax remittance and collection to support the country’s growth; and ease in targeted social interventions to support Nigerians.

During the CBN Governor, Godwin Emefiele, after the last Monetary Policy Committee meeting recently, disclosed that it would be launched on Independence Day celebration.

He said, On October 1, a Nigerian should be able to download the e-Naira app either through Google play store or Apple App store, onboard themselves, fund their e-Naira wallet, using their bank accounts or with cash at a registered agent.”

According to him, the e-Naira launch was not going to be a one off thing, but a journey that would start on October 1.

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TECHDIGEST – The official website of the upcoming Central Bank of Nigeria’s (CBN) digital currency, the eNaira, has already recorded over a million hits barely 24 hours after going live.

The website has gone live, exactly one week to the planned launch of the initiative.

The development shows a reflection of the level of interest in the proposed digital currency. According to Thisday, the website promises easier financial transactions for users of e-Naira, offers opportunity for peer-to-peer payments which allows users to send money to one another through a linked bank account or card; allows customers to move money from their bank account to their e-Naira wallet with ease; can monitor their e-Naira wallet, check balances and view transaction history; and make in-store payment using their e-Naira wallet by scanning QR codes.

In addition, customers are allowed to scan the QR Code on the website to get started. CBN Governor, Mr. Godwin Emefiele, while speaking to a gathering of foreign investors in New York, recently, had told his audience that because of activities surrounding the country’s Independence celebration on October 1, the earlier planned launch of the e-Naira on same date would likely be rescheduled to October 4, 2021.

“The central bank would not want the event to take the shine away from the Independence celebration,” he said.

“We are going to be the first country in Africa to launch a digital currency. It is a novel idea because we think it will facilitate trade, Nigeria being the biggest economy in Africa, this will set the tone to tell Africa that we are ready to lead and we would indeed lead in trade and we would make sure that happens.

“Between all central bankers in ECOWAS, we are already working on certain collaboration to make trade, payment and banking system integrate in such a way to set example on the African Continental Free Trade Area (AfCFTA),” he added.

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TECHDIGEST – AbokiFX, a popular mobile and web-based platform that collates the black market foreign exchange rates in Nigeria, on Friday announced it will temporarily suspend the publishing of rates on all its platforms, hours after receiving threats from the Central Bank of Nigeria (CBN).

The apex bank had said it would shut down the platform, which Governor Godwin Emefiele described as “illegal and criminal” and accused of carrying out an “illegal activity that undermines the economy”.

After the Monetary Policy Committee’s two-day meeting in Abuja, Emefiele confirmed that the apex bank was also planning to prosecute abokiFX’s supposed owner, Olusegun Adedotun Oniwinde, for “illegal forex trading” and “economic sabotage”.
“I have given instructions to our experts to go after his website and let it be clear that we will go after him because we can’t allow this to continue,” Emefiele said, adding that the CBN does not recognize any foreign exchange market window apart from the Investors and Exporters (I&E) window.

Why Nigeria has different exchange rates

Nigeria is Africa’s largest producer of oil, a commodity that brings in more than 90% of the country’s foreign exchange earnings. Between 2014 to 2016, a plunge in global oil prices caused a dollar crunch that resulted in an economic recession.

But rather than an outright devaluation of the naira, the CBN adopted a multiple exchange-rate regime. This involved keeping a stronger rate pegged to the U.S. dollar for official transactions and a weaker floating rate for investors and exporters, known as the NAFEX window.

Other rates were introduced for travelers and small and medium-sized businesses (SMBs) while there’s also the parallel or black market, where foreign currencies are traded unofficially and the naira is often valued less than the NAFEX rate.

A historic plunge in oil prices triggered by the Covid-19 pandemic last year caused a more severe scarcity of hard currency in Nigeria. The CBN was forced to devalue the naira twice last year, amid other measures meant to stabilize the exchange rate such as limiting forex deposits and withdrawals over the counter and banning the sale of forex to exchange bureaus.

In March, the apex bank also replaced the exchange rate at the official window, set at ₦379/$1, with the NAFEX rate of ₦410.25/$1, as part of efforts to ditch the multiple exchange rate system that’s been said to distort the market and frustrate foreign investors, in favor of a single-rate system. That left Nigeria with only two rates – the NAFEX rate and the parallel market rate – from almost five different rates as of early 2020.

Where abokiFX comes in

Before abokiFX, Nigerians wanting to change currencies in the unofficial black/parallel market could only obtain information on rates manually, such as through phone calls to money changers.
However, the platform, which was launched in 2014 has gained popularity as a go-to source for information on the value of the naira against the major foreign currencies in the black market. It is used by market operators for trading and news organizations for reporting.

In recent weeks, and particularly after the CBN stopped forex sales to Bureau De Change (BDC) operators a month ago, the value of the naira has plummeted sharply, with the gap further widening between the parallel and NAFEX rates.

Before the ban, the local unit traded at around ₦520/$1 but fell to ₦570/$1 on Friday. A day before, the naira recorded its biggest single-day plunge in the parallel market in several months, a ₦8.00 or 1.42% decline from ₦562/$1 on Wednesday to ₦570/$1, per abokiFX data.

Meanwhile, data on the FMDQ securities exchange window, where forex is traded officially, showed that naira closed at ₦412.88/$1 on Friday. Currency speculators profit from this difference between the black market and official rates through round-tripping and other forms of currency manipulation practices that negatively affect the value of the local currency.

Allegations of economic sabotage
According to the CBN Governor, Oniwinde, who is based in the United Kingdom, publishes arbitrary rates without contacting BDCs and uses his website for forex manipulations and speculations, making profits from the significant disparity in rates quoted on abokiFX and the official exchange rate.

Emefiele added that the apex bank had been studying the activities of the platform in the last two years. “There was a time we asked our colleagues to call the abokiFX to ask how he conducts the rates.”

“The CBN act section 2, does make it clear that only the Central Bank can determine the value of the naira, and yet a single individual living in England continues to manipulate the exchange rate and make a huge profit which he withdraws through an ATM in London.

“It is economic sabotage and we will pursue him, wherever he is, we will report him to international security agencies, we will track him, Mr. Oniwinde, we will find you, because we cannot allow you to continue to conduct an illegal activity that kills our economy,” Emefiele said.

The CBN head also alleged that Oniwinde was an illegal forex dealer with over 20 bank accounts in eight banks that are filled with money from speculative activities and he’s sold “tens of millions of forex” to several Nigerian companies, violating the country’s foreign exchange laws.

abokiFX debunks claims

abokiFX in a statement released on Friday debunked the CBN’s claims and said all allegations towards its director were not confirmed.
“All allegations against our director are yet to be confirmed but we at abokiFX DO NOT trade FX nor do we manipulate parallel market rates,” the statement reads. “Outside the media allegation, we have not received any communication from any government body and our accounts are not closed as stipulated in the media.”

The company has, however, temporarily suspended rate updates on all its platforms to “get better clarity of the situation”, adding that it “sincerely hopes the suspension will lead to the Naira appreciation from next week.”

“Final rates have been posted this evening but the abokiFX news section and the crypto rates section will still be active,” the statement adds. “With our decision to temporarily suspend online rates publication, we are aware that there will be limited visibility of parallel rates information which will impact decision making for many.”

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TECHDIGEST – The Central Bank of Nigeria (CBN) has said that its soon to be launched digital currency, e-Naira, will strengthen the stability of the banking system as deposits become more diversified when more people are banked.

The Central Bank Digital Currency (CBDC) will also make it easier for the banking system to comply with existing laws such as anti-money laundering, customer protection against fraud and ensuring the safety and stability of the payment system.

This was made known by CBN’s Deputy Governor, Operations, Mr Folashodun Shonubi, at the Chartered Institute of Bankers of Nigeria (CIBN) advocacy dialogue series 4 webinar held on Thursday in Lagos.

The theme of the event was, ‘Central Bank Digital Currencies: Insights for the 21st Century Banker.

What the Deputy Governor of CBN said

Shonubi said: “The Central Bank in its implementation has ensured the e-Naira feeds our economy and provides greater value.

“The central bank digital currency offers all the benefits of cash but in digital form. Every single digital currency is an electronic version of the cash, the legal tender. When you make a cash payment, settlement is done instantly; digital currencies entail the same promises and even more.

“CBDC offers a safer option from the privately issued cryptocurrency which have been based on the possibility to enable cheaper transactions but have now been used for investment.

“The intention is not to eliminate other forms of payment but to complement the current areas of payment options, thereby ensuring the stability of the payment system in the long run. I expect in the coming days we will see rapid inclusion rates.

“For banks in developing nations, it will enhance their liquidity, efficiency in national remittances and challenge the high cost of remittances as the world rebounds in the post-pandemic. I am of the view that the era of CBDC promotes greater opportunities, and the central bank must be aware of the risks and mitigate them.”

Speaking at the event, Lamido Yuguda, the Director-General of the Securities and Exchange Commission (SEC), one of the key players in the successful operation of the digital currency, said that the e-Naira, which is about to be launched in October, would help improve the capital market when combined with vibrant inter-developmental policies, which would lead to financial inclusion, especially in the capital market.

The SEC boss said, “This is an opportunity for the fintech market to connect our people to existing opportunities in the financial market, connecting our people with investment opportunities in other climes. Once we do that, we would grow our market, Nigeria has 200 million people. We are blessed with a hardworking youthful population.

“This capital market would in turn finance the necessary infrastructure investment that this country needs today.”

What you should know

Recall that on July 27, 2021, the CBN Governor, Godwin Emefiele, after the Monetary Policy Committee (MPC) meeting, confirmed the launch of its digital currency (e-Naira) pilot program in October. He also spoke on the importance of eNaira in Africa’s largest economy that included cross-border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social interventions.

Earlier in September, SEC, which had sought to regulate crypto on the grounds that they qualify as securities transactions, disclosed that the recent launch of the country’s digital currency, e-naira, is the result of its engagement with the CBN.

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TECHDIGEST – The CBN recently sent a presentation to Nigerian banks about the eNaira project, revealing more details about its design and operational module. As seen by Nairametrics, the presentation described how the new currency would be designed and operated.

In fact, the report states that the e-Naira is a legal tender for the entire country. The report also mentions that it will have non-interest-bearing CBDC status, a transaction limit for customers, and a value-based transaction limit.

Participants in the e-Naira program are featured in five stages, including:

Monetary Authority Suite; The Central Bank will be handing the first product component that includes issue, distribute, redeem and destroy the currency. Store data on a cloud server, monitor and analyse currency transactions.
Financial Institution Suite; licensed financial institution will be able to request currency or issue stablecoins, manage digital currency across branches, KYC, identify and AML compliance capability.
eGovernment Suite; the government will b able to efficiently process digital payments sent to and received from citizens and businesses.

Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation.

Retail Consumer Suite; features user-centred designs for a great user experience. The architecture will be expandable to enable innovation; features advanced privacy and security.
Consequently, the proposed transaction cost for the e-Naira wallet was also outlined by the Nigerian Central Bank.

The digital currency infrastructure does not charge for user-to-merchant transactions and P2P wallet transactions.
It shall be the responsibility of Nigerian banks to promote and market the centrally issued digital currency as a cash alternative to existing and potential customers in support of the Nigerian apex bank’s goal for financial inclusion.

In order to catalyse the adoption of the e-naira, banks will facilitate onboarding and provide world-class customer service.

Nigerian banks will be allowed to invite all their customers to register for the e-Naira. Besides pre-generated codes, the banks can send invitation codes for onboarding to a specific list of selected customers. Onboarding will be done for customers who have a code assigned by their banks. The banks have already validated and verified these customers.

Moreover, the Central Bank stated the wallet provided by its institution was merely a stop-gap measure for meeting the deadline, given that banks and other licensed operators may provide their own wallets since it didn’t intend to compete against the banks.

As part of the digital currency initiative, Nigeria’s central bank has made clear that NIBSS and other switching platforms will still be relevant, existing infrastructure can be integrated and leveraged in the e-Naira implementation.

As a National Critical Infrastructure, the e-naira system will be subject to comprehensive security checks, all data and personally identifiable information (PII) will be kept off the ledger and will not be stored on the ledger.

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TECH DIGEST – The Central Bank of Nigeria, CBN, on Monday said it was developing a Tertiary Institutions’ Entrepreneurship Scheme, TIES, to re-orientate, train and finance entrepreneurship ideas by Nigerian graduates.

The CBN Governor, Godwin Emefiele, stated this in a goodwill message to the 35th Conference of Vice Chancellors of Nigerian Universities, holding at the Kano State University of Science and Technology, KUST, Wudil.

Represented by Adebowale Olabimtan-Idowu, CBN Deputy Director, Development Finance, Emefiele said there was need to re-orientate youths from waiting for white collar jobs to entrepreneurship.

He said that the scheme was designed to support the development of entrepreneurial mindsets and culture, through the introduction of a platform that provides seamless access to affordable finance by graduates.

It would also assist in creating employment for many youths graduating from various institutions of higher learning in the country annually, he added.

“An estimated 600,000 graduates from our tertiary institutions enter the labour market annually, after participating in the National Youth Service Corps (NYSC) programme, seeking the already thinned out white collar jobs.

“The situation has contributed significantly to the rising youth unemployment across the country,” he said.

Mr Emefiele said that the proposed scheme would also provide a platform for building digital skills relevant to Nigeria’s broader developmental goals.

He explained that efforts were ongoing aimed at addressing the impacts of the COVID-19 pandemic on production sectors and dwindling oil revenues in the country.

“Micro, Small & Medium Enterprises (MSMEs) portend great opportunities for addressing these gaps and accelerating economic growth by leveraging our vibrant youth population,” he said.

NAN

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By Inyene Ibanga

TECH DIGEST – Early February this year, the Central Bank of Nigeria (CBN) released a circular to banks and financial institutions, warning that transactions in and facilitating payments for cryptocurrency exchanges were prohibited.

The CBN further directed all banks and financial institutions to identify and close accounts associated with individuals or entities that carry out transactions in cryptocurrencies and operate cryptocurrency exchanges. According to the bank, this was a reminder to the directive it issued in 2017.

Justifying the directive, the CBN governor, Godwin Emefiele stated that cryptocurrencies were being used to facilitate scams and money laundering, which were highly inimical to the economy and could further weaken the naira.
The directive received the backing of Nigeria’s anti-corruption agencies, the Economic and Financial Crimes Commission (EFCC), the Independent Corrupt Practices and Other Related Offences Commission (ICPC) and the Nigerian Financial Intelligence Unit (NFIU).
The EFFC, through its chairman, Abdulrasheed Bawa, views cryptocurrencies as avenues through which criminals launder the proceeds of crime and illicit financial transactions, saying that the Commission had recovered loots of cryptocurrencies worth about $20 million from cybercriminals.
Similarly, Bolaji Owasanoye, the chairman of ICPC, believes cryptocurrencies could be used to fund insurgencies, adding that the #EndSARS protest was largely financed through the cryptocurrency.
The anti-graft agencies disclosed that they currently have a number of cases linked to cryptocurrencies but have been unable to track the suspects, noting that it will be difficult to solve cases involving cryptocurrencies because the role players were unknown.
Consequently, the Securities and Exchange Commission (SEC) suspended the approval of cryptocurrencies and related products in Nigeria. This came after its earlier indication to accept bitcoins. The capital market regulator would only permit such digital currencies if they operate bank accounts within the Nigerian banking system.
But a gale of reactions from within and outside the cryptocurrency community has continued to trail the directive of the apex bank, causing fears that the ban could adversely impact fintechs and hinder the rising potentials of the Nigerian economy.
Considering the growing global popularity of the cryptocurrency phenomenon, which is being used in over 100 countries, and Nigeria’s rating as the world’s second-largest user of virtual currencies, the CBN directive succeeded in stirring anxiety in the cryptocurrency community.

In a reaction described by many as political, the Vice President, Professor Yemi Osinbajo contested that rather than a blanket prohibition of cryptocurrencies, the situation actually called for a more robust regulatory framework that addresses the concerns raised about the cryptos without killing the rising potentials of digital currencies for the country’s economy.
A cryptocurrency is an encrypted digital or virtual currency meant to be a medium of exchange. It is a form of payment that can be exchanged for goods and services online. Many companies have issued their own currencies, often called tokens, and these can be traded specifically for the goods or services that the company provides.

Cryptocurrencies work through the blockchain, which is a decentralised technology spread across many computers, which manages and records transactions.
More than 10,000 different cryptocurrencies are traded publicly, but Bitcoin, Ethereum, Tether, Binance Coin, Dogecoin, and Litecoin are listed among the top ten highest trading cryptocurrencies in the world by market capitalisation.

As of May, the total value of all cryptocurrencies was more than $1.7 trillion, while the total value of all bitcoins, the most popular digital currency, stood at about $735 billion.

One of the major benefits of the cryptocurrency is that it removes central banks from managing the money supply, which is why many people have been racing to buy them. It has the potential for high returns and diversification.
Also, international cryptocurrency transactions are faster than wire transfers too. Cryptocurrency transactions take only a matter of minutes or even seconds. And anyone is free to use a cryptocurrency, without the need to set up a bank account, which requires documentation and other paperwork.

Another benefit is the blockchain technology behind cryptocurrencies. The advanced blockchain decentralised processing and recording system makes cryptocurrencies more secure than traditional payment systems.

Still, with cryptocurrencies, the transaction costs are much lower unlike the fees for transferring money from a digital wallet to a bank account. Transactions can be done at any time of the day or night, and there are no limits on purchases and withdrawals.

However, the downside of cryptocurrencies is that they are mostly driven by the private sector, without official oversight or regulation. This means that cryptocurrencies can be easily exploited by criminals to perpetrate fraudulent and other illegal activities, such as funding terrorism, insurgency, and political instability.

The CBN later explained that its warning did not bar Nigerians from transacting in cryptocurrencies or holding digital currencies, but was aimed at protecting the banking sector from the activities of cryptocurrencies.

While accepting that it prohibited cryptocurrency transactions in the banking system, the monetary regulator maintained that it did not place any restrictions on cryptocurrencies in general and neither is it discouraging individuals or entities from trading them.

Meanwhile, the CBN has announced plans to begin the issuance of the digital currency, an electronic model of currency notes and coins that can be stored in the digital wallet, before this year runs out. The bank said this would facilitate smooth international remittances to Nigeria.

With the state-regulated digital currency, Nigeria would be able to issue its own sovereign digital currency to complement cash notes and coins. This would help to address CBN’s fears over the susceptibility of cryptocurrencies to criminal abuses and deepen financial inclusion.

At this time when the cryptocurrency is gaining global popularity and acceptance, the apex bank should take steps to create opportunities for dialogue and collaboration with cryptocurrency traders and exchanges.

Therefore, it is important for banking/financial sector regulators to focus more on promoting people-friendly policies to enable more Nigerians to take advantage of the growing cryptocurrency market to achieve economic progress.

Inyene Ibanga is Managing Editor TechDigest and writes from Wuye District, Abuja.

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TECH DIGEST – 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.”

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TECH DIGEST – Nigeria will soon create its digital currency, the Central Bank of Nigeria said it on Tuesday as the bank continues to face questions over its ban on cryptocurrency transactions in the country.

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said this while addressing journalists after a two-day meeting of the Monetary Policy Committee in Abuja.

He said the idea of a digital currency would soon become a reality in the country, and that the central bank has already set up its committee, which is working on the concept.

Mr Emefiele appealed to bandits and others involved in criminal activities across Nigeria to drop their arms and embrace the apex bank’s Anchor Borrowers’ Programme (ABP). He said those involved in criminality can be more productive by embracing the apex bank’s scheme.

“If you want an economy to grow, the level of insecurity must be low because if there is a high level of insecurity like what we see today, the economy will suffer,” Mr Emefiele said, adding that there is a connection between security and economic growth.

“I, therefore, would like to appeal to our brothers, who decide that they want to live in bushes and forests, that they should please, begin to retreat, drop their arms and come and embrace the anchor borrowers’ programme,” he said.

“If they do so, it will help them; if they choose not to do so, they will be confronted by the security as this battle continues.

“I am optimistic before the end of the year that the security challenges confronting the country will substantially abate.”

Mr Emefiele said that “almost the whole of N300 billion has now been disbursed” from the bank’s facility designed to provide succor to households and SMEs affected by the harsh impact of the pandemic.

Nigeria exited recession in the last quarter of 2020, amid the disruption brought on the global economy by the coronavirus pandemic.

On Tuesday, Mr Emefiele said that even though the economy had exited recession, economic recovery was still fragile. He explained that there was a need for monetary authorities to consolidate on all measures taken to tackle inflation and grow output.

Commenting on the Creative Industry Financing Initiative, the CBN boss said the apex bank has disbursed N3.19 billion to 341 beneficiaries across movie production, movie distribution, music and software development.

The CBN governor also explained the need for collaboration with Nigerians abroad, through the issuance of diaspora bonds targeted at sundry infrastructure projects.

Even though Nigeria’s public debt stock was currently high, he said the MPC opined that project-specific diaspora bond issues could conveniently pay itself back without imposing a burden on government fiscal position.

This, he said, will boost foreign exchange supply and ease exchange rate pressure.

Responding to questions about cryptocurrency, the CBN governor reiterated that it has no place in the Nigerian financial system.

When asked whether the CBN had been vindicated following the crash of cryptocurrency in recent weeks, Mr Emefiele said the CBN investigated and found out that a substantial percentage of Nigerians are involved in cryptocurrency.

“Don’t get me wrong, some may be legitimate but I dare say most are illegitimate and I will corroborate that,” he said.

“Under cryptocurrency and bitcoin, Nigeria comes second right? But in the global size of the economy, Nigeria comes 27th.

“So do you think that there is some correlation? You think those countries whose economies are second and 26th will allow you to grow your cryptocurrency business to second position, if what is inside is a big deal that is going to profit everybody?” he asked.

Mr Emefiele spoke about the volatility of the cryptocurrency market, citing how Tesla boss, Elon Musk, tweeted that he was going to invest about $1.5 billion in crypto and the rates went to the highest roof.

“And he then tweeted again and raised a fee concerns and the thing plunged,” the CBN governor said.
“Elon Musk had himself decided that he will no longer deal in cryptos. And so if a man who felt it was good suddenly decides to say it’s no longer good and then you…don’t forget, those who invented crypto said it is encrypted.

“When they say it’s encrypted, it means that whatever is happening between me and you is only know to the two of us. And you know what? In case I defraud you because it is encrypted, you can’t even disclose my name and you can’t even get your money back.”

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