The Central Bank of Nigeria (CBN) has banned banks and financial institutions from trading or trading currencies in early February, citing threats to the financial system.

The Central Bank of Nigeria has joined the list of emerging markets for digital currency to reduce transaction costs and increase participation in the formal financial system.

“Nigeria has become the first country in Africa, and has introduced its first digital currency to its citizens,” President Muhammadu Buhari said in his opening remarks in the capital Abuja. “The central bank’s digital currency and its so-called blockchain technology could boost Nigeria’s gross domestic product by $ 29 billion over the next 10 years.”

The International Monetary Fund (IMF) estimates that GDP will be Africa’s largest economy by $ 480 billion by 2021.

The introduction of the digital currency, called Inira, came after the central bank banned banks and financial institutions from conducting transactions in early February due to concerns over the financial system.

Since its inception, the Enaira Forum has received more than 2.5 million daily visits, 33 banks have merged on the platform, successfully producing 500 million C ($ 1.2 million) and more than 2,000 customers, Central Bank Governor Godwin Emefile said in his opening remarks. .

Central Bank digital currencies or CBCs are national currencies – unlike their crypto counterparts such as Bitcoin and Ethereum, they are awarded in part because they are not linked to the currency. Although the central bank is trying to stabilize the currency, it will meet 5.6% weak naira this year.

“The naira and the physical naira have the same value and will always be exchanged for one naira in one naira,” Imfile said.

The digital currency is expected to integrate cross-border trade and financial, streamline transactions and improve monetary policy, the central bank said.

“Along with digital innovations, CBCs can improve economic growth, increase exchange rates, improve financial inclusion and make monetary policy more effective,” Buhari said. “Digital money” will help move many more people and businesses from the formal to the formal sector, thereby increasing the country’s tax base, “he said.

The Central Bank of Nigeria (CBN) on October 1 selected Bitcoin Ink as its technical partner to help create the currency that was to be introduced.

Nigeria is one of the first states in the world to join the Bahamas and the Central Bank of the Caribbean to issue national digital currencies. Earlier this year, China launched a trial version of the Digital Renminbi. Countries in Africa, from Ghana to South Africa, are experimenting with digital forms of legal tender for faster and cheaper exchanges without having to control their financial systems.