Jack Rea, economist for the IMF’s African department, spoke about the threats posed by eNaira, and noted the measures that the authorities are taking to avoid them.
According to Jack Ree’s report, state digital currency eNaira
carries risks to the implementation of monetary policy, cybersecurity, operational stability, as well as financial integrity and stability.
“ENaira wallets can be perceived or even function effectively as a deposit at a central bank, which could reduce the demand for commercial bank deposits.”
Ri believes that eNaira’s cybersecurity and operational risks need to be managed digitally. An economist in the IMF’s Africa department notes that the Nigerian authorities have taken measures to manage risks:
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The transfer of funds from bank deposits to eNaira wallets is governed by daily transactions and balance restrictions to mitigate the risks of diminishing the role of banks and other financial institutions.
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Financial integrity risks, including those arising from the potential use of eNaira for money laundering, are mitigated through the use of a tiered identity verification system and stricter controls on less trusted users.
“So far, only people with a bank account can open a wallet, but over time, the coverage will be expanded to people with registered SIM cards, or mobile phones without identification numbers. For holders of the latter categories, stricter transaction and balance restrictions will apply. Despite this, wallet holders who meet the highest standards of identity verification cannot store more than 5 million naira (about $ 12,200) in their wallet. ”
According to an economist in the IMF’s Africa department, it is expected that regular cybersecurity assessments will be conducted to address cybersecurity risk.
Jack Rea stresses that the IMF remains committed to providing technical assistance and policy advice to the Nigerian authorities. The IMF is ready to cooperate with the government in the field of data analysis, international research, exchange of experience with other countries and discuss the further development of eNaira, including its structure, regulatory framework and other aspects.
Before the launch of the national digital currency, the authorities in Nigeria tightened the regulation of cryptocurrencies. So in February, the Central Bank of Nigeria banned commercial banks from serving the accounts of cryptocurrency exchanges and other companies working with cryptocurrencies. Then he clarified that cryptocurrencies are not prohibited in the country, and local residents can continue to trade digital assets. Recently, the Central Bank of Nigeria sent instructions to the country’s commercial banks to block the accounts of a cryptocurrency company and two individuals accused of trading digital assets.
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