President Muhammadu Buhari is scheduled to formally unveil the Nigerian Central Bank Digital Currency (CBDC), known as the eNaira, on Monday 25 October 2021, at the State House, Abuja. Reports indicates that the launch of the eNaira is a culmination of several years of research work by the Central Bank of Nigeria in advancing the boundaries of the payments system to make financial transactions easier and seamless for every stratum of society.
From the definition of the currency, E-Naira is a Central Bank of Nigeria-issued digital currency that provides a unique form of money denominated in Naira. E-Naira serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments. Despite the numerous empirical evidence showing the linkage between the e-Naira and economic benefit, several criticisms can be put forward to show that e-Naira is a brake toward actualizing the target of financial inclusion and digitalizing the economy.
Many have considered the e-naira as a very risky and dangerous move because they said we are unable to “rationally” manage a single currency($) based exchange system, now we won’t introduce a much more fluid platform with all sorts of possibilities of cyberattacks, abuses, and insider corruption based compromises.
The commonly perceived criticism of e-Naira as a brake to economic benefit is the question of that, is the e-Naira secured? because it is associated with the internet connection as most people still perceive digital currency as a scam. Therefore, is the e-Naira digital currency secured toward preventing it from crashing or external attack from hackers? E- Naira sounds good but its uncertainties in Nigeria might be quite epileptic and fraudulent practices which might retard its advancement as it relates to an internet connection.
But the truth is that the E-naira is a digital currency, which should not be compared with Cryptocurrency which is not regulated by any government. The e-naira is being regulated by CBN and by default that makes FG through CBN the financial risk bearer just as we have NDIC for DMBs. CBN through PFIs is liable for any financial loss of any kind on the platform. It is a digital currency, not a cryptocurrency Persie.
E-Naira is a great innovation, but there are privacy concerns. Think of it this way, the movement of your e-Naira is traceable, unlike cash where money can exchange hands without a trace. Now, in terms of ease of tax remittance, easy investigations, and so on, the E-Naira will be of great help to the government
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