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