
Nigeria to explore ICOs and stablecoins to broaden payments landscape
Nigeria published a new policy document, pledging to rethink its ICO stance to attract FDI as well as a blockchain-based CBDC amid slow eNaira uptake.
Nigeria published a new policy document, pledging to rethink its ICO stance to attract FDI as well as a blockchain-based CBDC amid slow eNaira uptake.
Bank for International Settlements found that payment system efficiency is the key motivator, but unlike other regions, African central banks see CBDCs as a great tool for monetary policy.
The lack of clarity on CBDCs and virtual currencies among Nigerians led to a slump in eNaira adoption rates, forcing the central bank to offer transport incentives to drive up adoption.
Since its launch in October 2021, the eNaira has seen lackluster uptake, and the Central Bank of Nigeria is seeking to remedy this in its latest move.
The eNaira adoption has been lackluster, with the total transaction volume over the past year being just a fraction of the digital assets trading volume.
The central bank believes that making the eNaira available to feature phone users will boost uptake, although some are skeptical about security and privacy.
The securities regulator has issued policies for ICO issuers, digital asset exchanges, custodians, VASPs, and when assets qualify as securities, but the central bank is still hostile.
The Central Bank of Nigeria said the upgrade makes onboarding easier, makes the wallet faster, and allows users to create a much wider range of payments.
The PwC Global CBDC Index placed Nigeria and the Bahamas at the top of the retail CBDC developments, with Thailand and Hong Kong leading the wholesale sector.
The IMF says that eNaira could raise financial inclusion to meet the ambitious target of 95%, but says Nigeria must be vigilant as it poses several risks.
The Bank of Tanzania is looking to expand its digital currency research and development team capacity, following the footsteps of Nigeria’s e-Naira, according to central bank Governor Florens Luoga.
The Central Bank of Nigeria further said that $150,000 had been transacted on its app, with 78,000 merchants from 160 countries enrolling for payments.