Central Bank of Nigeria to begin testing digital naira by the end of 2021

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The head of the IT security department of the Central Bank of Nigeria, Rakiya Mohammed, announced that the regulator will begin testing its own digital currency this year.

Mohammed explained that the digital currency of the Central Bank of Nigeria will act as a supplement to the state currency – Nigerian Naira, and also be used to ease restrictions on foreign exchange transactions in the country. However, the policy of the central bank to protect the Nigerian naira from the depreciation of the exchange rate only provoked public interest in cryptocurrencies.

Despite their ban in Nigeria, the government is ready to introduce a state stablecoin that will be available to the entire population of the country. In February, the Nigerian central bank banned commercial banks from serving cryptocurrency firms, arguing that cryptoassets are being used for illegal activities.

The regulator later clarified that local residents are allowed to trade cryptocurrencies. Mohammed added that the Central Bank of Nigeria has been exploring the possibility of creating its own digital currency for about two years now and intends to launch a pilot proof of concept (PoC) testing program for digital naira by the end of 2021.

Note that the Central Bank of Nigeria spoke about plans to launch a state stablecoin after the recent announcement by the Bank of Ghana, which is going to become the first central bank in Africa to implement a digital currency.

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