Nigeria’s eNaira crypto project is getting a new spotlight on the new IMF report which revealed that this project draws interest from around the globe and could face some challenges as we can see more in today’s cryptocurrency news.
Nigeria’s eNaira central bank digital project is drawing attention and interest from some financial institutions and gained traction among other central banks that are looking to imitate a similar project according to the International Monetary Fund. The report by Jack Ree explained why Nigeria’s eNaira was drawing interest from around the globe and one of the reasons according to him, for the interest in the project Is because of the control of the Nigerian apex bank and its influence over the digital currency.
It continued that unlike the volatile digital coins such as Ethereum and Bitcoin that dropped in value these past few days while the value of the eNaira was tied to the physical national currency. Keying into Nigeria’s central bank claim that the CBDC projects will boost remittance and at the same time will lead to an increase in financial inclusion, the IMF report said that the e-naira is expected to lower the remittance transfer costs and make it quite easy for the Nigerian diaspora to remit funds in their country and get the eNaira from international money transfers operators so they are then able to transfer them to recipients in the country by wallet-to-wallet transfers without costs.
Despite the positives, the report identified that the eNaira could bring some risks for the monetary policy implementation in the country and the report shows that the central bank digital currency wallets could be perceived or work as a deposit at a central bank which may reduce the demand for deposits in commercial banks. Other challenges for the project include a need to manage cybersecurity and operational risks that were associated with it. You will recall that we reported that the country of Nigeria continued working on the project despite the early challenges faced by the project with more than 400,000 wallets being registered on the project.
As recently reported, Almost a year after Nigeria’s central bank banned banks from serving entities in crypto and investors, the country’s Securities and Exchange Commission established a new fintech unit that will help provide regulatory frameworks for the digital asset industry. The financial watchdog announced that the new branch in crypto will research crypto investments and products in order to create a regulatory guideline framework that will help protect the investors.
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