Nigeria Will Soon Create Digital Currency — CBN Governor, Emefiele

Nigeria will soon create its digital currency, the Central Bank of Nigeria said Tuesday as the bank continues to faces questions over its ban on cryptocurrency transactions in the country.

The governor of the Central Bank of Nigeria (CBN), Godwin Emefiele, said this while addressing journalists after a two-day meeting of the Monetary Policy Committee in Abuja.

He said the idea of a digital currency would soon become a reality in the country, and that the central bank has already set up its committee, which is working on the concept.

Newsmen reported how the MPC on Tuesday retained the Monetary Policy Rate (MPR) at 11.5 per cent, voted to maintain the asymmetric corridor of +100/-700 basis points around the MPR, retained the Cash Reserve Ratio at 27.5 per cent, and left the Liquidity Ratio at 30 per cent.

Emefiele appealed to bandits and others involved in criminal activities across Nigeria to drop their arms and embrace the apex bank’s Anchor Borrowers’ Programme (ABP). He said those involved in criminality can be more productive by embracing the apex bank’s scheme.

“If you want an economy to grow, the level of insecurity must be low because if there is a high level of insecurity like what we see today, the economy will suffer,” Mr Emefiele said, adding that there is a connection between security and economic growth.

“I, therefore, would like to appeal to our brothers, who decide that they want to live in bushes and forests, that they should please, begin to retreat, drop their arms and come and embrace the anchor borrowers’ programme,” he said.

“If they do so, it will help them; if they choose not to do so, they will be confronted by the security as this battle continues.

“I am optimistic before the end of the year that the security challenges confronting the country will substantially abate.”

Emefiele said that “almost the whole of N300 billion has now been disbursed” from the bank’s facility designed to provide succor to households and SMEs affected by the harsh impact of the pandemic.

Nigeria exited recession in the last quarter of 2020, amid the disruption brought on the global economy by the coronavirus pandemic.

On Tuesday, Emefiele said that even though the economy had exited recession, economic recovery was still fragile. He explained that there was a need for monetary authorities to consolidate on all measures taken to tackle inflation and grow output.

Commenting on the Creative Industry Financing Initiative, the CBN boss said the apex bank has disbursed N3.19 billion to 341 beneficiaries across movie production, movie distribution, music and software development.

The CBN governor also explained the need for collaboration with Nigerians abroad, through the issuance of diaspora bonds targeted at sundry infrastructure projects.

Even though Nigeria’s public debt stock was currently high, he said the MPC opined that project-specific diaspora bond issues could conveniently pay itself back without imposing a burden on government fiscal position.

This, he said, will boost foreign exchange supply and ease exchange rate pressure.

Responding to questions about cryptocurrency, the CBN governor reiterated that it has no place in the Nigerian financial system.

When asked whether the CBN had been vindicated following the crash of cryptocurrency in recent weeks, Mr Emefiele said the CBN investigated and found out that a substantial percentage of Nigerians are involved in cryptocurrency.

“Don’t get me wrong, some may be legitimate but I dare say most are illegitimate and I will corroborate that,” he said.

“Under cryptocurrency and bitcoin, Nigeria comes second right? But in the global size of the economy, Nigeria comes 27th.

“So do you think that there is some correlation? You think those countries whose economies are second and 26th will allow you to grow your cryptocurrency business to second position, if what is inside is a big deal that is going to profit everybody?” he asked.

Mr Emefiele spoke about the volatility of the cryptocurrency market, citing how Tesla boss, Elon Musk, tweeted that he was going to invest about $1.5 billion in crypto and the rates went to the highest roof.

“And he then tweeted again and raised a fee concerns and the thing plunged,” the CBN governor said.

“Elon Musk had himself decided that he will no longer deal in cryptos. And so if a man who felt it was good suddenly decides to say it’s no longer good and then you…don’t forget, those who invented crypto said it is encrypted.

“When they say it’s encrypted, it means that whatever is happening between me and you is only know to the two of us. And you know what? In case I defraud you because it is encrypted, you can’t even disclose my name and you can’t even get your money back.”