The Central Bank of Nigeria (CBN) claims to be looking for creative approaches to increase the use of the Central Bank Digital Currency (CBDC).
This was said by CBN Governor Godwin Emefiele while attending the eNaira Hackathon this year. The program, which is scheduled for August 4, 2022, brings together innovators from throughout Africa to explore ideas that will assist the growth of the eNaira.
The CBN Governor revealed that the occasion will hasten the expansion of startups in Africa. The CBN has teamed up with the Africa FinTech Foundry (AFF) for the event to connect innovators.
“eNaira – Africa’s Gateway to a Digital Economy” is the theme for this year. During this hackathon, the CBN may be considering new technologies that solve data privacy concerns and fortify the CBDC against attacks from con artists.
The International Monetary Fund (IMF) stated that as Central Bank Digital Currency (CBDC) gains traction, “CBN and other central banks in Africa will require to create the experience and technical knowledge to mitigate the risks to data privacy, including from possibilities cyberattacks, and financial integrity.
The IMF has already noted that the CBDC has the potential to reduce transaction fees in sub-Saharan Africa, which presents a problem for many people.
The IMF observed in research titled “More African Central Banks Are Exploring Digital Currencies” that improving cross-border payments will increase international trade.
With an estimated cost of just under 8% of the transfer amount, Sub-Saharan Africa is the most costly area to send and receive money.
By reducing the length of the payment chain and fostering more competition among service providers, CBDCs could make transferring remittances simpler, quicker, and less expensive.
Faster cross-border payment clearing would encourage trade both inside the region and beyond.
According to the paper, CBDCs can be used to administer targeted welfare payments, particularly in times of need like a pandemic or natural disaster. Nigeria has established a standard for other nations in the area to follow, according to the IMF.
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