Rakia Mohamed, an IT specialist at the Central Bank of Nigeria (CBN), has announced that the apex bank is making efforts to issue a central bank digital currency in the country.
According to a report in the People’s Gazette, Mohamed told reporters after a meeting of the Bankers’ Committee in Abuja on Thursday:
“Before the end of the year, the Central Bank will make a special announcement and possibly launch a pilot scheme to be able to offer such currency to the public.”
In early May, CBN governor Godwin Amephile said that digital currencies would “come to life” in Nigeria despite the current ban.
Indeed, Nigeria’s central bank banned commercial banks and other financial institutions from serving crypto exchanges in February, citing debunked claims of cryptocurrencies being used primarily for illegal transactions. .
According to Mohamed, CBN’s digital currency Naira will act as a complement to cash notes. The IT expert also said that the planned digital currency will be used to ease foreign exchange restrictions in the country.
As previously reported by Cointelegraph, CBN’s “naira defense” policy under CBN’s forex sanctions policies led to an increase in crypto adoption in Nigeria in the lead-up to the February ban.
Foreign remittance transfers account for the largest non-oil foreign exchange revenue in Nigeria, with millions of expatriate populations repatriating family members living abroad. World Bank figures show $26.4 billion in such payments flowing into the country in 2019.
RELATED: Crypto will ‘come to life’ in Nigeria, says central bank governor
Mohamed revealed that CBN has been exploring the potential of a central bank digital currency for almost two years. The CBN executive said that the apex bank is ready to go ahead with developing a proof of concept for conducting pilot trials for the scheme.
Nigeria’s CBDC plan comes after a similar announcement from neighboring Ghana. In early June, Cointelegraph announced that the central bank of Ghana was going to become the first bank in Africa to launch a CBDC.