By Michael Scott
The Central Bank of Nigeria (CBN) confirmed the integration of Near Field Communication (NFC) technology. The addition aims to improve the adoption rates for the country’s central bank digital currency (CBDC).
The ousting of the CBN’s governor Godwin Emefiele in early June 2023 for alleged financial crimes has not strangled Nigeria’s determination for its CBDC project. Despite the charging of the governor, who played a critical role in the CBDC project, CBN signals continuity for its rollout.
NFC Integration Set to Enhance eNaira Application
A publication in The Sun’s local news platform revealed that CBN recently integrated NFC technology to enhance the CBDC mobile application. The upgrade will facilitate the mobile devices’ interaction with payment terminals when in proximity. Doing so will facilitate convenient, faster, and contactless payments via eNaira.
While CBN acknowledged the existence of versions that feature QR codes, it considers adding NFC technology will bolster CBDC adoption rates. Joseph Angaye, the CBN’s deputy director in risk management, affirmed that integrating NFC affirms its devotion to leveraging innovative tech towards enhancing the eNaira user experiences.
Nigeria’s CBDC Limits Scope to Minimize Fraud Risk
Angaye illustrated that including cutting-edge technology shows that the CBDC application features programmability features. The director confirmed that the presence of programmability features mandates limiting CBDC payments as an exclusive scope to the designated government-offered programs to minimize susceptibility to fraud risk.
Angaye added that the programmability nature of CBDCs selectively accommodates fund allocation to the Nigerian farmers to fulfill designed purposes, including tool acquisition. The implementation of limited scope indicates that funds channeled to the eNaira wallet are non-divertible for other unrelated purposes. This approach ensures that the allocation utilization adheres to the intended use.
Nigeria’s Central Bank Explore Options to Drive eNaira Usage
Angaye reiterated that CBDCs present numerous advantages that retail users could reap. The risk management executive highlighted that it would facilitate a rapid transaction process. Also, eNaira would help mitigate the settlement risks.
Angaye restated that eNaira targets to resolve the financial inclusion challenge. He challenged other economic players to embrace Nigeria’s pioneering role in CBDCs. In particular, he notes that the country’s initial challenges and experiences offer invaluable insights for countries considering CBDCs trials.
Nigeria unveiled eNaira in 2021, thus joining the exclusive countries with CBDC offerings. The West African country has registered dismal adoption rates and is unable to meet expectations. The experience prompted the CBN to explore various options that would drive eNaira usage.
Nigeria’s central bank rolled out eNaira use cases within the transport sectors by integrating USSD functionality within the offering. The ousted Governor Emefiele lamented the low adoption rates by alleging that commercial banks hand to stifle the eNaira’s expansion as they pursue profitability.
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