Experts have described the Central Bank of Nigeria’s plan to launch a digital currency before the end of the year as unrealistic.
An Information technology Specialist at CBN, Rakiyat Mohammed, who unveiled the plan, had said, “Before the end of the year, the Central Bank will be making a special announcement and possibly launching a pilot scheme in order to be able to provide this kind of currency to the populace.”
An economist and the Chairman, Chartered Institute of Bankers of Nigeria, Abuja Branch, Prof. Uche Uwaleke, told our correspondent that the level of the country’s economic development among other financial concerns makes the launch of a CBN digital currency before the end of the year unfeasible.
He said, “The plan by the CBN to introduce digital currency is a welcome development. Its expected benefits include enhancing financial inclusion in the long run, lowering operational costs of handling physical cash as well as enhancing the efficiency of our payments system.
“But there are associated concerns regarding the likely impact on monetary policy transmission, financial stability, inflation as well as the role of financial institutions. These concerns and the level of our economic development make the suggested timeframe unrealistic.”
He added that central banks of more developed economies such as the US Fed Reserve and the European Central Bank were still researching the implications of introducing a CBDC.
He therefore advised the CBN not to be in a hurry and to commit resources to research in the area of digital currencies including possible mechanisms for controlling private virtual currencies such as cryptocurrencies.
Another economist, Alexander Umerie, who spoke in a separate interview on Friday agreed with the position of Uwaleke, stating that the implementation of a digital currency before the end of the year wasn’t feasible.
“I believe what the CBN is trying to say is that it is keying into the global trend, looking at what has gone on in China and even the European Union. But on the question of feasibility, I don’t see it being feasible this year,” he said.