The Central Bank of Nigeria’s newly-launched e-Naira will not affect deposits of commercial banks, says a financial expert and chief consultant, Biodun Adedipe.
Mr Adedipe stated this at the National Business Extra fourth anniversary lecture/awards on Thursday in Lagos while speaking on ‘Cryptocurrency Vs e-Naira: Issues, prospects and challenges in Nigeria economy’.
The expert, who was the guest speaker, said e-Naira could not replace deposits or reduce the ability of the banks to create credits.
“It has limits on the amount that can conveniently be carried in a physical wallet,” he said.
According to him, banks will not lose their deposits to digital naira because of limits on e-Naira wallet transactions.
The economist explained that cumulative balance limits and transfer limits introduced by the CBN on Tier 1, 2 and 3 e-Naira wallets were small compared with activities of commercial banks.
The cumulative balance limit for Tier 1 is N300,000 with a transfer limit of N50,000; Tier 2 balance is N500,000 with a transfer limit of N200,000. The CBN also pegged Tier 3 cumulative balance limit at N5 million with a transfer limit of N1 million.
X-raying the benefits of the e-Naira, Mr Adedipe noted that it would eliminate the cost of printing and minting currencies in the country.
The economist further mentioned that e-Naira would eliminate restrictions in making cross-border payments, enhance financial inclusion and allow users to avoid the cost and restrictions in transactions on digital platforms of commercial banks.
The financial expert said that recognising crypto as an asset, commodity or means of exchange should be determined by its most prevalent use in Nigeria.
He stressed the need for a regulatory framework underscored by the popularity of mobile money. Mr Adedipe noted that a regulatory framework was necessary due to trading in cryptos as alternative means of livelihood for tech-savvy, unemployed youths.
He said the framework should centre on what should be allowed, how it should be used, which financial institutions should be allowed, and monitoring framework and reporting requirements.
“Blockchain technology has come to stay and will become more important — Cryptos ride on the back of the blockchain technology,” said Mr Adedipe. “If we want to encourage investment in blockchain technology (which is no longer the future, but already here), then we need to create space for cryptos and other adaptations of the technology.”