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E-Naira will have far-reaching implications for banking sector – Economists



E-Naira will have far-reaching implications for banking sector – Economists

By Lydia Ngwakwe

Economists have said that the e-Naira, once deployed, will have farreaching implications for the future of the banking sector in Nigeria.

Experts, in separate interviews with the Nigeria News Agency , said the launch would be beneficial or destabilizing would depend on how it is implemented.

President Muhammadu Buhari on Monday launched the central bank’s digital currency, the e-Naira.

With the official launch, Nigeria becomes the first country in Africa and one of the first in the world to introduce a digital currency to its citizens.

Uche Uwaleke, Professor of Fice and Capital Markets, Nasarawa State University, Keffi, said without a doubt that the launch will have effects on the future of the banking industry.

“As you would expect, being among the early initiators of a technologically complex project such as a central bank digital currency, it is inevitable to create winners and losers and produce unintended consequences.

“The good news, however, is that the CBN appears to have devoted considerable time and resources to preventing undesirable outcomes, especially with regard to the health of the Nigerian banking sector.

“In any case, the fact that the CBN is testing e-Naira through pilot projects is a demonstration of a cautious approach. Having said that, the launch of the CBN digital currency is an important step which holds great promise for the Nigerian financial system and the banking sector in particular, ” he said.

The director of the Center for Economic Policy Analysis and Research (CEPAR), Professor Ndubisi Nwokoma, said the currency which is new, would face mistrust even as implementation progresses.

“The launch of the e-Naira is a new path the CBN is taking in the global practice of improving the payment system through the use of digital currency.

“This is new, even in advanced societies issues can arise as implementation progresses. Even today, many global companies have not fully embraced the use of cryptocurrencies in payments.

“Skepticism may be the order of the day, at first, except for those who are already familiar with digital currencies,” he said.

Sheriffdeen Tella, professor of economics at Olabisi Onabanjo University, Ago-Iwoye, Ogun State, said the e-Naira is a CBN-worthy innovation, hoping banks would keep fees low so as not to not frustrate the project.

“The e-Naira is a CBN-worthy innovation, although other countries are already interested in it. It should strengthen the cashless policy.

“This is an extension or addition to the normal funds transfer, except that it can be easily used for cross-border transactions. It also requires an app which may not be available for phones used by the poor.

“There needs to be more clarification on the modus operandi, even for educated people.

“We also hope that the banks will not defeat the project with ungodly charges. It’s a worthy financial innovation and any issues that might arise can be fixed as soon as they lift their heads, ” Tella said.

Source: NAN

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