10 Days To E-Naira Launch: CBN Mandates Business Owners To Accept The E-currency
10 days to e-Naira launch: CBN mandates business owners to accept the e-currency
The Central Bank of Nigeria has mandated that all merchants and business establishments throughout the country recognize and accept the e-naira as a form of payment, just ten days before the currency's official launch. As stated by the apex bank, digital currency is considered to be legal tender and must be treated as such.
Musa Jimoh, Director of Payment System Management at the Central Bank of Nigeria, made this announcement while appearing on Channels TV's "Business Morning" show.
For Mr Jimoh, the company's managing director, "Today, anywhere you present naira to pay, it must be accepted by law because it is our fiat currency." As a result, in the same way that the naira is accepted to the point where it cannot be rejected, the e-naira must also be accepted. If the e-naira is presented anywhere in this country, it must be accepted. In order to accept e-naira as payment, merchants must accept it as well.”
The Central Bank of Nigeria (CBN) is expected to launch this digital currency on October 1, to coincide with the 61st anniversary of Nigeria's independence. This currency, according to the bank, will make it easier for the banking system to comply with existing laws. The bank encourages citizens to download the e-naira wallet application on their mobile devices.
Substitute for Cryptos?
The Central Bank of Nigeria (CBN) issued a directive in February ordering banks to close accounts suspected of transacting in cryptocurrencies or operating cryptocurrency exchanges within their systems. That order effectively prohibited cryptocurrency transactions in the country.
Some of the reasons for the prohibition include the fact that cryptography prevents oversight, accountability, and regulatory oversight. Also arguing that cryptocurrency does not generate returns and is being used for criminal activities is the Central Bank of Nigeria.
Most importantly, the apex bank believes that because it did not issue the cryptocurrency, it does not qualify for classification as legal tender.
While cryptocurrency exchanges were severely harmed by the ban, Nigerians quickly shifted their attention to peer-to-peer (P2P) transactions and continued their lives as if nothing had happened at all. This has compelled the bank to issue its own digital currency, which will be powered by Bitt.Inc, a Barbados-based fintech company.
According to the apex bank, its decision to adopt a form of digital currency is a result of the significant increase in the use of digital currencies as a means of payment around the world, as well as the rise of Nigerian youths as leading investors in these novel assets in recent years.
But what are the chances that these Nigerian youths will give up stable cryptocurrencies such as Bitcoin and Ethereum in exchange for the e-Naira in the near future? Remittances, international transactions, wealth preservation, and investment are just a few of the reasons why Nigerians are flocking to cryptocurrency.
In Conclusion
According to the Central Bank of Nigeria, the e-Naira would be worth the same as the cash equivalent, and everything else would be worth the same as the cash equivalent.
“The liability of the e-naira money is directly on the Central Bank of Nigeria, which is similar to the liability of the cash you hold. The Central Bank of Nigeria (CBN) is responsible for the cash you currently possess. As a result, Nigerians will have the opportunity to bank with the Central Bank of Nigeria,” Mr Musa Jimoh explained.
The e-Naira does not, if this is the case, address the fundamental reasons why Nigerians prefer to hold digital currencies in the first place, which are listed above. So long as the CBN does not contribute to the achievement of these goals, it is unlikely to see the widespread adoption that it anticipates, at least for the foreseeable future.
The Central Bank of Nigeria's director has already admitted that the currency's acceptance and adoption will be low on October 1. He is, on the other hand, optimistic that the currency will experience some significant growth over time, if not immediately.
