How eNaira will affect Commerical banks’ deposit – IMF raises alarm

How eNaira will affect Commerical banks’ deposit – IMF raises alarm

The International Monetary Fund (IMF) has raised the alarm that the eNaira wallet may function as a deposit at the Central Bank of Nigeria and consequently reduce demand for deposits in commercial banks.

The warning is coming a month after President Muhammadu Buhari, and top officials of the Central Bank of Nigeria unveiled the eNaira at the State House, Abuja.

As a result, the Washington-based fund on Tuesday warned the CBN to manage the various risks associated with the digital currency especially the threats it pose to monetary policy implementation, cyber security, among others.

The IMF disclosed this in its ‘Country Focus; Five Observations on Nigeria’s Central Bank Digital Currency.’

The global body said, “Like digital currencies elsewhere, the eNaira carries risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability.

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“For example, eNaira wallets may be perceived, or even effectively function, as a deposit at the central bank, which may reduce demand for deposits in commercial banks. Relying as it does on digital technology, there is a need to manage cyber security and operational risks associated with the eNaira.”

The organisation added that the eNaira uses the same blockchain technology as Bitcoin or Ethereum, but is not a financial asset like the two.

According to the IMF, the launch of the digital currency is drawing interest from the global world, and other central banks because of the size and complexity of Nigeria’s economy.

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Mr Femi Adeoya is a Chartered Forensic Accountant and a Certified Fraud Examiner. He has over 20 years professional work experience in accounting, finance and business management processes. As an Accounting Software Expert, he has implemented and supervised accounting solution set up of over 50 small and medium businesses in Nigeria. As a passionate blogger, Mr Adeoya is an ardent writer and communicationist. He is the CEO of QUICK LOAN ARENA (quickloanarena.com), the number 1 loan apps review website in Nigeria. He is very passionate about the quick and instant loan industry in Nigeria and has written over 200 reviews on different loan apps and digital banks in Nigeria, USA, Canada and UK.

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