Stakeholders including Lagos Chamber of Commerce and Industry (LCCI) and Prof. Lauren Cohen, L. E Simmons, Professor of Business Administration, Harvard Business School, United States of America, among others Yesterday listed recommendations for the success of Nigeria’s Central Bank Digital Currency (CBDC).
They spoke at a symposium organized by the LCCI Financial Services Group which was held both physical and virtual.
On the topic of “Blockchain Technology, Cryptocurrencies and Central Bank Digital Currencies: Implications for the Global Financial Landscape”, Cohen tasked the Central Bank of Nigeria (CBN) to present the unique value of digital currency to ensure its dominance. on other decentralized financing systems to generate its success.
The Harvard professor said goals, success factors, achievable internal benchmarks and when to declare CBDC victory need to be considered and put in place.
He listed the positive economic implications of the CBDC as easier, cheaper and smoother transactions, more efficient and effective, better enforcement and tracking of contract and tax payments, and greater financial inclusion.
He noted, however, that the issue of privacy was a big blow to the CBDC that needed to be addressed.
“For it to be successful, a network group must be created to increase the breadth and depth of adoption to make it more valuable.
“The CBN is to be commended for deploying the CBDC the way it has, but more needs to be done to ensure that it firmly supports the decentralized financial system.
“This is the start of how fintech should be embraced to create value as the engine that fuels the dynamic landscape to seek breakthrough fintech innovations that are yet to come.
“However, the benchmarks need to be sensitive to time, adoption, driver and inclusion, with specific timelines,” he said.
Chief Sparkler, Sparkle Nigeria, Uzoma Dozie, said the government, as a big player in the CBDC, would create a ripple effect of success and facilitate the transition to a cashless and more digitalized financial country.
He noted that the CBDC would increase digital liquidity and help the government disburse social funds directly to beneficiaries.
“However, there is a need to expand infrastructure such as mobile devices, data availability to drive adoption of electronic money across the country,” he said.
LCCI President Ms Toki Mabogunje cited a report from Chainalysis which indicates that Nigeria currently has the 8th highest cryptocurrency adoption in the world.
Mabogunje, represented by Mr. Abimbola Olashore, Treasurer, LCCI, said opportunities in blockchain technology and digital currency could potentially add up to $ 29 billion to Nigeria’s gross domestic product (GDP) by 2030.
Mabogunje said that in recognition of these many opportunities, the Nigerian government is making concerted efforts to expand the policies and regulatory landscape to ensure that the benefits of digital financial innovations do not escape the country.
“We applaud the bold initiatives of the Central Bank of Nigeria (CBN) to develop a digital currency named ‘eNaira’, with Nigeria becoming the first country on the continent and one of the first in the world to introduce a centrally supported digital currency.
“This strengthens the Nigerian government’s willingness to harness the potential of the technology ecosystem to spur economic growth and development through facilitated informal and formal sectors.
“The LCCI urges MDAs and the competent regulatory authorities responsible for the design and implementation of technologies, innovations and investment policies to effectively coordinate their activities.
“This is about developing a harmonized plan that will create a level playing field for private and public players in the cryptocurrency ecosystem.
“Regulations on blockchain technology and digital currency must be dynamic, robust, inclusive, responsive, globally competitive and adapted to the context of Nigeria.
“This will give a boost to young tech-savvy people to innovate and boost investor confidence and encourage significant investments in the blockchain ecosystem,” she said.
Financial Services Group, LCCI Chairman Obinna Anyanwu said the COVID-19 pandemic has highlighted the importance of digitized financial systems as an imperative for developing economies like Nigeria to integrate more efficiently in the global supply chain.
He said there have been growing trends in the use of blockchain technology to create virtual money or digital currency and in the management of payments, financial flows and transactions.
“We strongly believe that the central bank digital currency (CBDC) recently launched by apex bank could complement the current areas of payment options, thereby ensuring the stability of the payment system in the long term.
“This is why we are here today to deepen the conversation in general about the opportunities of blockchain technology and innovations and in particular how the recently released regulatory guidance on the e-Naira will lead to financial transformation. digital in Nigeria, ”he said.