IMF Issues eNaira Warning to CBN

• The International Monetary Fund has issued a stern warning to the CBN about the introduction of the eNaira

• The IMF believes that the wallet of the digital currency may reduce demand for deposits in commercial banks

• The Washington-based fund wants the CBN to manage various risks that could pose a threat to monetary policy implementation and cyber security

The International Monetary Fund has stated that the recently launched eNaira wallet may function as a deposit at the Central Bank of Nigeria and reduce demand for deposits in commercial banks.

The digital currency was launched by General Muhammadu Buhari four weeks ago at the State House in Abuja.

The IMF has now warned the CBN to manage the various risks attached to the use of the digital currency which includes threats to monetary policy implementation and cyber security.

The global body shared this in its ‘Country Focus; Five Observations on Nigeria’s Central Bank Digital Currency.’ that was released on Tuesday.

A part of the Washington-based fund publication reads:

“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 IMF noted that the launch of the digital currency has been drawing interest from the world globally due to the size of the economy.

On the bright side, the global body noted that the eNaira will promote financial inclusion and improve remission of remittances.

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