According to a central bank of Nigeria official, Nigeria may deploy a central bank digital currency (CBDC) before the end of 2021.
According to local media reports, Rakiya Mohammed, an information technology specialist at the Central Bank of Nigeria (CBN), revealed that the bank has been considering a CBDC for more than two years.
“By the end of the year, the central bank will make a special announcement and maybe begin a pilot project to be able to distribute this type of currency to the general public,” Mohammed said.
One justification for a CBDC, according to Mohammed, is to make it easier to send remittances into the country. Nigeria received more than $5 billion in remittances quarterly before the pandemic struck, causing a worldwide drop in remittances. Nigeria set up a short rewards program earlier this year to attract overseas transfers to the country.
Mohammed also stated that the CBDC will serve as a complement to cash, and that the CBN has studied the architectural, accessibility, and privacy concerns associated with a digital currency.
CBN will also review other technological possibilities, involve diverse industry stakeholders, and test the digital currency.
The Nigerian government is considering how to regulate the usage of private cryptocurrencies in the country. The CBN ordered all local banks to close accounts related to crypto platforms earlier this year.