Central Bank Digital Currency in Nigeria: Opportunities and Risks

Abstract

Purpose: Nigeria is the first African country to issue a central bank digital currency (CBDC) or fiat digital currency. The eNaira CBDC was issued as a money equivalent to be used along with paper Naira. This chapter identifies the features, opportunities and risks of the CBDC in Nigeria, also known as the eNaira.

Method: This chapter uses the discourse analysis method to assess the opportunities and risks of CBDC.

Findings: The opportunities which CBDC present to Nigeria include improved monetary policy transmission, convenience, efficient payments and increased financial inclusion. Some identified risks include digital illiteracy, increased propensity for cyber-attacks, data theft and the changing role of banks in a full-fledged CBDC economy.

Originality: This chapter contributes to the literature by evaluating the pros and cons of fiat digital currency such as a CBDC.

Citation

Ozili, P.K. (2022), "Central Bank Digital Currency in Nigeria: Opportunities and Risks", Grima, S., Özen, E. and Boz, H. (Ed.) The New Digital Era: Digitalisation, Emerging Risks and Opportunities (Contemporary Studies in Economic and Financial Analysis, Vol. 109A), Emerald Publishing Limited, Leeds, pp. 125-133. https://doi.org/10.1108/S1569-37592022000109A008