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Nigeria introduces first digital central bank money in Africa

Nigerians were able to register for the first time on Tuesday for payments with eNaira, the first digital central bank currency in Africa. Named after the local currency, the naira, the digital version is intended to facilitate cross-border trade in Africa’s largest economy, boost e-commerce and financially integrate the large percentage of the 200 million Nigerians who do not have a bank account.

More than 30 Nigerian banks have already registered on the digital currency platform managed by the central bank. With eNaira The government also wants to compete with cryptocurrencies like Bitcoin, which are beyond the control of governments and global regulators, it said. A corresponding wallet app can be connected to a bank account or topped up using the prepaid method. Among other things, state social benefits are to be paid out in the form of eNaira. Payments should be able to be tracked by the central bank.

Numerous central banks around the world are busy with pilot tests or at least examinations as to whether the introduction of digital central bank money could be worthwhile. In July, the ECB announced that it would start a two-year investigation phase that would deal with questions of technical design and data protection. But that is not yet a decision about an introduction.

You are also in China, where the digital yuan is currently being extensively tested. An official introduction could probably take place in February for the Olympic Winter Games in Beijing in 2022. In Africa, Nigeria’s neighbor Ghana is hot on the heels with a digital currency called eCedi. However, a pilot project should first sound out whether there is a market for it.

Central bank money is only available to private individuals in this country in the form of cash. Anyone who pays digitally with euros pays with so-called deposit money, which is generated as book money by commercial banks and is actually just a promise that central bank money will be paid out. The banks work with what is known as a minimum reserve – that is, they generate significantly more bank money than they actually have in central bank money. Strictly speaking, only central bank money is legal tender, but deposit money is accepted practically everywhere in everyday life. (With material from the dpa) /


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