Nigeria became the first African country to roll out digital currency as President Muhammadu Buhari launched the country's new digital eNaira currency on Monday.
Nigeria, which is Africa's largest economy, joins China and a few other countries using or testing central bank-regulated electronic tender.
The goals of the digital currency are toimprove financial inclusion, foster economic growth through better economic activities, increase remittances and enhance the effectiveness of monetary policy.
According to President Buhari, the adoption of the Central Bank of Nigeria Digital Currency (CBDC) can increase the nation’s Gross Domestic Product (GDP) by $29 billion over the next 10 years.
He added that blockchain, which is the underlying technology of the digital currency, would enable the government to send direct payments to citizens eligible for specific welfare programmes as well as foster cross border trade.
"Let me note that aside from the global trend to create Digital Currencies, we believe that there are Nigeria-specific benefits that cut across different sectors of, and concerns of the economy," President said during the launch held in Abuja.
He added, "The use of CBDCs can help move many more people and businesses from the informal into the formal sector, thereby increasing the tax base of the country."
Pointing out that the journey to create a digital currency for Nigeria began in 2017, President Buhari assured Nigerians of the safety and scalability of the CBDC system.
He said, "Work intensified over the past several months with several brainstorming exercises, deployment of technical partners and advisers, collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission (NCC), integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System."
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