The Central Bank of Nigeria (CBN) plans to begin its central bank digital currency (CBDC) pilot on October 1, according to Nigerian financial news publication Nairametrics.
According to Nairametrics private sources, Rakiya Mohammed, the bank’s director of information technology, called a webinar last Thursday to confirm the pilot’s start date and emphasise that the CBN could not afford to be left behind in global CBDC development.
The pilot scheme, known as ‘GIANT,’ has been in development since 2017 and runs on the open-source blockchain Hyperledger Fabric.
Earlier in June, Mohammed touted that a digital naira could reduce the cost of remittance transfers for Nigerians working abroad, which, considering Nigeria was the tenth largest remittance recipient worldwide in 2020, is an important factor in the CBN’s drive for digitisation.
Financial inclusion is also a major incentive. Currently, Nigeria’s rate of financial inclusion stands at just 60%. As a digital form of cash, a CBDC would help make cash more accessible and enable more of the population to participate in Nigeria’s growing e-commerce economy.
Other motivations include the benefits to macro and growth management, cross-border trade support, improved tax revenue collection, and easier facilitation of targeted social policies.
Despite Nigeria’s progress towards a realised CBDC, the CBN banned commercial banks from servicing crypto exchanges earlier in February this year.
Since then, the central bank has pushed for careful regulation rather than a prohibition of cryptocurrency, with deputy governor of the CBN Edward Adamu clarifying that crypto trading is not banned in Nigeria.
Nigeria is now the second West African nation in 2021 to announce a launch date for the pilot phase of its CBDC. Leading the way is the Bank of Ghana, which has indicated that it will begin testing its digital cedi by September.
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