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Nigerian Lenders Frustrating CBDC’s Adoption — Central Bank Governor

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Apathetic Nigerian lenders are unhappy with the adoption of e-naira because they are concerned it could deprive them of a key source of income, said Godwin Emefiele, Governor of the Central Bank of Nigeria (CBN). Emefiele said the central bank is working on a channel that will allow unbanked Nigerians to open e-wallets.

E-Naira undercuts lenders’ investment in mobile banking infrastructure

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Nigeria’s central bank governor Godwin Emefiele has reportedly criticized some lenders he accuses of hindering the adoption of the e-naira digital currency in the country. Emefiele said lenders are not prioritizing the promotion of a central bank digital currency as they fear it could deprive them of the revenue generated from conventional banking services.

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Explaining the reasons for the reluctance of creditors, Bloomberg report said e-naira transactions do not incur a fee, and deposits are not considered cash on creditors’ books. In addition, the e-naira digital currency is said to undermine lenders’ investment in mobile banking services as part of their efforts to increase fee income.

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Lender “Apatia”

Describing lenders’ reluctance to promote the use of central bank digital currency (CBDC) as “apathy,” Emefiele said the Central Bank of Nigeria is about to complete trials of a channel that allows unbanked Nigerians to open e-naira. wallets. The Central Bank is working with mobile operator MTN on this channel.

Since the launch of the digital currency in the fourth quarter of 2021, only 700,000 e-naira wallets have been downloaded, according to CBN. One reason for this is the fact that only account holders can open the e-naira wallet.

Meanwhile, following a two-day meeting of the central bank’s monetary policy committee, CBN reportedly a decision was made to raise the monetary policy discount rate (MPR) to 14%. Regarding the rate hike, Emefiele is reported to have said:

If inflation continues to grow at this rate, we will continue to tighten [the] course, but we are looking at other measures that will slow down inflation and food prices. But if this does not happen, we [MPC] cannot promise that rate hikes will stop.

The committee, however, resolved “keep the asymmetric corridor at +100/-700 basis points around the MPR.” The liquidity ratio also did not change and amounted to 30%.

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