Nigeria: CBDC Poses Threat to Financial Stability

Shri

Financial Report: According to a new study by the Central Bank of Nigeria (CBN), the country's recently launched e-naira central bank digital currency (CBDC) poses a risk to financial stability. Despite the potential for such a digital currency to help increase Nigeria's "financial inclusion rate from 64.1% in 2021 to the target of 95.0% by 2024," the CBN also discussed how publishing e-naira USSD codes for non-smartphone users could help increase the number of e-naira transactions. In addition to enhancing financial inclusivity, the central bank claims that CBDC will "expand the scale and stability of bank deposits." However, while CBDC may bring these and other benefits, the CBN notes in the report that converting bank deposits into e-naira could pose a risk to the stability of the banking system.

Yamini003

Such threats are inevitable.

Ritu13

The central bank of this country is actually conducting research on this.