ABUJA, Oct. 25 (Xinhua) -- Nigerian President Muhammadu Buhari on Monday launched the eNaira, the country's central bank digital currency (CBDC), becoming the first African nation to introduce an official digital currency.
With the launch of the eNaira in Abuja, Buhari noted Nigeria is also one of the earliest in the world to introduce a digital currency to its citizens.
In recent times, a global trend is the use of physical cash in conducting business and making payments has been on the decline, the Nigerian leader said at the unveiling of the eNaira Digital at the Statehouse in Abuja on Monday.
"This trend has been exacerbated by the onset of the COVID-19 pandemic and the resurgence of a new digital economy. Alongside these developments, businesses, households, and other economic agents have sought new means of making payments in the new circumstances," he explained.
An overwhelming majority of central banks across the world have started to consider issuing digital currencies in order to cater to businesses and households seeking faster, safer, easier, and cheaper means of payments, in response to the aforementioned developments, Buhari said.
"A handful of countries including China, Bahamas, and Cambodia have already issued their own CBDCs," he noted, saying the adoption of the CBDC and its underlying technology, called blockchain, can increase Nigeria's gross domestic product by 29 billion U.S. dollars over the next 10 years.
"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 and concerns of the economy," he said.
According to Buhari, the journey to create a digital currency for Nigeria began sometime in 2017.
He said alongside digital innovations, CBDCs can foster economic growth through better economic activities, increased remittances, and improved financial inclusion.
The Nigerian leader also declared that the introduction of the eNaira would enable the government to send direct payments to citizens eligible for specific welfare programs, as well as foster cross-border trade.
Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), said at the launch of the CBDC that the eNaira is the digital equivalent of the physical naira, the country's currency.
"As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira - like the physical Naira - is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira," Emefiele said.
The CBN has given careful consideration to the entire payments and financial architecture and has designed the eNaira to complement and strengthen the ecosystems and has implemented security safeguards and policies to maintain the integrity of the financial system, he said.
The Nigerian top banker said with the eNaira, there would be strict adherence to the anti-money laundering and combating the financing of terrorism standards in order to preserve the integrity and stability of Nigeria's payment system.
Already, 33 banks are fully integrated and live on the eNaira platform, with over 2,000 customers onboard and over 120 merchants successfully registered on it at the time of the eNaira launch, according to the CBN governor.
In late September, the CBN's eNaira website was test-run ahead of the proposed official launch.