The emergence of E-Naira – an Era of Digital Currency and an end to Bureau De Change Operation in Nigeria.
Over the years, Foreign exchange regulation and management have been one of the dominant challenges faced by Nigerians due to influence from Bureau de change and this has been one of the problems CBN including commercial banks has been facing when it comes to direct disbursement of foreign exchange. However, As the rate of Cryptocurrencies and stable coins acceptance increases across countries, the central bank is left with the options to either provide an alternative coin to Nigerians or Be left behind by the future surrounding digital currency usage. Due to this dominant challenge, the central bank of Nigeria has embarked on the journey to introduce e-Naira into Nigeria’s financial system. The achievement of this will not only help them trace every foreign currency bought in Nigeria but would also help them in deepening transparency and irregularities in foreign currency conversions rates. Thereby, help them in mitigating abuse of foreign currency exchange rates in Nigeria.
E-Naira which is a central bank digital currency is a virtual currency that would be introduced to Nigerians by the apex bank. Its introduction would enable Nigerians to have quasi accounts through their Bank Verification Numbers which CBN would get from their various commercial banks. The use of this digital Foreign currency such as (US dollars, Euro, Pounds, etc) has been rumored that the Central Bank of Nigeria would start selling it directly to Nigerians by 2022 through the e-Naira digital currency mediums.
According to the statement made by the Director, Information Technology Department, Central Bank of Nigeria (CBN), Mrs. Rakiyat Mohammed, He categorically stated during the banker’s committee meeting that the central bank of Nigeria will be launching a Central Bank Digital Currency (CBDC) before the end of 2021. This also follows the statement issued by the governor of the central bank a few weeks ago which stated: “Under cryptocurrency and Bitcoin, Nigeria comes 2nd while in the global side of the economy, Nigeria comes 27th. We are still conducting our investigation and we will make our data available.”
This alone speaks in the volume of what would be the fate of Bureau de change in Nigeria when the Central bank of Nigeria introduces the new e-Naira digital currency. The CBDC according to analysts would help regulate the illicit exchange of foreign currencies by Bureau de change (BDCs) in Nigeria.
From the effort already taken by the apex bank in abolition of bureau de change operation in Nigeria, it can be deduced that CBN is very keen on its implementation as they plan to redesign the architectural structure of Nigeria financial systems. The central bank of Nigeria wants to clearly visualize and control the flow of foreign currencies in all of its financial systems and this is why they are working effortlessly towards the new rise in e-naira digital currency.
The New e-Naira digital currency is projected to go live possibly between October 2021- 2022 and this will be a new dispensation in Nigeria’s financial system and beyond.
What this digital currency will do is that it will allow every Nigerian within the walls of the nation can easily get US DOLLARs, EUROs, POUNDs, etc from the Central bank directly which will then be distributed through commercial banks. Also, if this happens as CBN has envisioned, it will allow Nigerians, businesses, including Manufacturing companies who want to transact money in multiple currencies to directly open a domiciliary account from their already existing Naira account from commercial banks which can enable the person to buy dollar which will be facilitated by the commercial bank by just debiting or crediting the exact account at ease. And when this happens, CBN would have a clearer view and deep insights into what goes on in its financial operations. Thus leaving no room for Bureau de change uncontrollable activities in Nigeria.
Autor: Isaacoed Buchi Jamie