*Central Bank of Nigeria says the selection of Bitt Incorporated from among highly competitive bidders was based on the Fintech company鈥檚 technical competence, efficiency, platform security, interoperability, and implementation experience

*We think that this is a noble idea, and we are not the first鈥�. Many other central banks are at advanced stages of revealing their own digital currencies 鈹�Godwin Emefiele, Governor of CBN

Isola Moses | 绿帽献妻

In preparation for launch of the country鈥檚 digital currency branded 鈥楽peed Wallet, the Central Bank of Nigeria (CBN) has announced the formal engagement of Bitt Incorporated, a global Fintech company as a technical partner, for its proposed e-Naira digital currency.

Mr. Osita Nwanisobi, Director of Corporate Communications Department at CBN, in a statement said the selection of Bitt Incoporated from among highly competitive bidders was based on the company鈥檚 technical competence, efficiency, platform security, interoperability, and implementation experience.

 

Photo: CryptoPlacesDirectory

The statement said: 鈥淚n choosing Bitt Incoporated the CBN will rely on the company鈥檚 tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean countries.

RELATED CBN Releases CBDC Guidelines, Launches E-Naira Digital Currency October 1

鈥淏itt Inc. was key to the development and successful launch of the Central Bank Digital Currency (CBDC) pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021.鈥�

绿帽献妻 reports Bitt is a Barbados-based financial technology “company that utilises blockchain and distributed ledger technology to facilitate secure peer-to-peer transactions with seamless mobile money across a suite of Bitt’s Software and Mobile Applications.”

Earlier, in regard to the benefits of the financial inclusion initiative, Mr. Godwin Emefiele, Governor of CBN, has disclosed that the Central Bank Digital Currency (CBDC) will herald increased cross-border trade, accelerate financial inclusion, and lead to cheaper cum faster remittance inflow.

Emefiele said the digital money, also known as cryptocurrency, would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection in the country.

He recently announced that a national digital currency would be launched October 2021.

READ ALSO CBN鈥檚 Framework To Strengthen Cybersecurity Resilience In Other Financial Institutions

The apex bank had also said the digital currency would be treated as a critical national infrastructure to protect it from operational and cybersecurity risks.

Further clarifying the e-Naira project, the CBN governor stated: 鈥淵ou have some Naira in your account and you chose to convert part of your Naira into a digital wallet by way of a digital currency. We will support that.

鈥淚f, for instance, you have N10million in your account. Of course, when this starts, the CBN will move some of the balances of banks with CBN to those banks in digital currency.

The CBN Governor further stressed: 鈥淪o you go to your bank, you have N10million and you want to move N2million out of your N10million into a digital currency.

鈥淭hey鈥檒l debit your account and move it to your wallet of N2million digital currency, which you can spend across countries.鈥�

Emefiele added, 鈥淪o we think that this is a noble idea and we are not the first鈥�many other central banks are at advanced stages of revealing their own digital currency.

鈥淥ur own digital currency, which is tagged e-Naira, will certainly come into operation, by the special grace of God, by October and we are working very hard for this.鈥�

READ ALSO Nigerian Currency: We鈥檙e working with EFCC, Police, others to prosecute abusers of Naira 鈹�CBN

He also said: 鈥淲e believe that transactions will be cheaper and more efficient, as there will be less to complete.

鈥淎nd in terms of financial inclusion, we believe that with over 30 percent of bankable adults still outside the financial system, the ability to have offline payment through our e-Naira initiative will bring most of them into the formal financial sector.鈥�

He added: 鈥淭he use of cash is declining everywhere in the world, just as in Nigeria and with the advent of digital commerce, which is booming in the country, more and more people are adopting the use of electronic money to facilitate digital commerce.

鈥淪o our e-Naira is a digital representation of cash, which means as a fiat currency, it is a fiat currency that will be just as acceptable as the physical or analogue Naira.

鈥淲e recognise the need for wide stakeholder engagement and education to be able to create awareness for the use of e-Naira as alternative to cash to further drive towards a cashless society.鈥�

IMF鈥檚 stand on adopting crypo-assest as a national currency

Though the CBN had openly warned Nigerian investors against cryptocurrency transactions previously, the International Monetary Fund (IMF) as well reportedly called for caution by countries seeking to use crypto-assets as their national currencies. According to the global financial institution, the demerits of adopting crypto-assets as a national currency outweigh merits, agency report said.

IMF was said to have given the advice in a post on IMFBlog titled: 鈥淐ryptoassets as National Currency? A Step Too Far鈥�.

The transnational financial institution has acknowledged that the new digital forms of money have the potential to provide cheaper and faster payments, enhance financial inclusion, improve resilience and competition among payment providers, and facilitate cross-border transfers.

Nevertheless, IMF stated that the potential benefits cryptocurrencies are not a straightforward process.

It noted that it requires significant investment as well as difficult policy choices, such as clarifying the role of the public and private sectors in providing and regulating digital forms of money

Some countries might be tempted by a shortcut 鈹�adopting crypto-assets as national currencies, adding, 鈥渕any are indeed secure, easy to access, and cheap to transact.鈥�

IMF stated: 鈥淲e believe, however, that in most cases, risks and costs outweigh potential benefits.

鈥淐rypto-assets are privately issued tokens based on cryptographic techniques and denominated in their own unit of account.鈥�

Then, the organisation added the proviso that 鈥渢heir value can be extremely volatile. Bitcoin, for instance, reached a peak of $65,000 in April and crashed to less than half that value two months later.

鈥淎nd yet, Bitcoin lives on. For some, it is an opportunity to transact anonymously鈥攆or good or bad.

鈥淔or others, it is a means to diversify portfolios and hold a speculative asset that can bring riches but also significant losses.鈥�

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