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Thursday, May 19, 2022

Nigeria’s enaira is the most developed digital currency in the world – PwC

Nigeria’s e-Naira has been ranked as the most developed Central Bank Digital Currency (CBDC) in the world after beating out Bahamas, China, South Korea and other countries to lead the top 10 rank.

This is according to the 2022 PwC Global CBDC index released on Monday April 4, 2022.

The reports also added that retail projects in the index are led by the Central Bank of Nigeria’s (CBN) eNaira, the first CBDC in Africa, and the Sand Dollar, issued by the Central Bank of the Bahamas as legal tender in October 2020, making the Bahamas the first country to launch a CBDC.

China became the first major economy to pilot a CBDC in 2020 with the digital yuan, and as of March 2022 pilot programs are running in 12 cities, including Beijing and Shanghai.

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On the wholesale side, the leading project in the Index is the combined effort of the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BoT) to launch the mBridge project, focused on developing a proof-of-concept prototype to enable real-time, cross-border foreign exchange payments on distributed ledger technology. Also ranked highly is the work of the Monetary Authority of Singapore (MAS), with two new CBDC projects, as it continues the development of a wholesale CBDC for cross-currency payments.

The PwC report also provides an overview of stablecoins, digital currencies collateralized by, for example, a fiat currency, which can allow a bridge to be created between the traditional financial ecosystem and digital technologies.

Haydn Jones, Blockchain & Crypto Specialist, PwC UK said: “This year’s Index shows that central banks are ramping up activity in the digital currency space. Countries are at differing levels of maturity with CBDCs and each country has different motivating factors. Increasing financial inclusion, facilitating cross border payments and controlling financial crime are all factors that come into play. We expect CBDC research, testing and implementation will intensify in 2022. The success of Nigeria’s eNaira is likely to spur CBDC development in countries where financial inclusion is one of the key desired outcomes.”

John Garvey, Global Financial Services Leader, PwC United States said: “It is especially important for financial institutions to understand where central banks are with digital currencies, because ultimately CBDCs will start flowing through the payment system and start to hit bank balance sheets. Careful consultation with central banks is critical in clarifying the business case for CBDCs, from inclusivity, financial performance, and interoperability perspective. One thing that is clear, lowering the cost of payments in an economy provides value throughout the economy and for citizens. If CBDCs can ultimately enable more efficient payments, that will benefit everyone.”

On October 25, Nigeria became the first country in Africa to introduce a digital currency, with the launch of the eNaira. It has been touted as a “game-changer” that will transform commerce in the continent’s largest economy

 The eNaira speed wallet app records over 360,000 downloads — 10 days after launch. 

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