Nigeria’s eNaira leads in PwC’s global digital currency index

0
4222

The Central Bank of Nigeria’s eNaira and the Sand Dollar of the Bahamas led the retail project indexes of central banks globally in the 2022 PricewaterhouseCoopers’s Central Bank Digital Currency (CBDC) Global Index.

Titled ‘The race to digital money is on,’ the PwC index analyses and ranks the leading retail and wholesale CBDC projects. The Index also evaluates the current stage of CBDC project development by taking into account central bank opinion and public interest.

PwC in its latest index report said that over 80 percent of Central Banks are considering launching a Central Bank Digital Currency (CBDC) or might have done so already.

Retail projects in the Index are led by the Central Bank of Nigeria’s (CBN) eNaira, the first CBDC in Africa, and the Sand Dollar, issued by the Central Bank of the Bahamas as legal tender in October 2020, making the Bahamas the first country to launch a CBDC,” the report published Tuesday said.

Overall, the report stated that retail CBDC projects (digital currencies designed for public use) have reached greater maturity levels than wholesale projects (digital currencies used by financial institutions that have accounts with central banks), and that the past year has seen progress on several prosperous wholesale pilots.

Index Performance

The report said China became the first major economy to pilot a CBDC in 2020 with the digital yuan, and that as of March 2022 pilot programs are running in 12 cities, including Beijing and Shanghai.

On the wholesale side, the leading project in the Index is the combined effort of the Hong Kong Monetary Authority (HKMA) and the Bank of Thailand (BoT) to launch the mBridge project, the PwC report said.

It said the mBridge project is focused on developing a proof-of-concept prototype to enable real-time, cross-border foreign exchange payments on distributed ledger technology.

Similarly, ranked highly in the Index is the work of the Monetary Authority of Singapore (MAS), with two new CBDC projects, and it continues the development of a wholesale CBDC for cross-currency payments.

Experts’ Opinions

Haydn Jones, PwC’s UK Blockchain and Crypto Specialist said: “This year’s Index shows that central banks are ramping up activity in the digital currency space. Countries are at differing levels of maturity with CBDCs and each country has different motivating factors.”

He said the increasing financial inclusion, facilitating cross border payments and controlling financial crime are all factors that come into play.

“We expect CBDC research, testing and implementation will intensify in 2022,” Mr Jones added.

He said the success of Nigeria’s eNaira is likely to spur CBDC development in countries where financial inclusion is one of the key desired outcomes.

In his remarks, John Garvey, PwC’s United States Global Financial Services Leader, said: “It is especially important for financial institutions to understand where central banks are with digital currencies because ultimately CBDCs will start flowing through the payment system and start to hit bank balance sheets.”

He said careful consultation with central banks is critical in clarifying the business case for CBDCs, from an inclusivity, financial performance and interoperability perspective.

“One thing that is clear, lowering the cost of payments in an economy provides value throughout the economy and for citizens. If CBDCs can ultimately enable more efficient payments, that will benefit everyone,” Mr Garvey added.

Source: https://www.premiumtimesng.com

LEAVE A REPLY

Please enter your comment!
Please enter your name here