The Central Bank of Nigeria (CBN), the country’s leading regulator for financial services institutions, has cited the San Francisco blockchain payment firm Ripple in its recent report regarding digital currencies.
CBN Quoted Ripple in CBDC Research
Specifically, in its latest 2023 report, the CBN cited Ripple’s report on central bank digital currencies (CBDCs) multiple times in its recent study titled “Economics of Digital Currencies.”
According to CBN, the study is a comprehensive collection of studies focusing on various aspects of CBDCs. It includes their underlying concepts, implications on fiscal system stability, financial inclusion, and more.
Per the regulator, the report’s primary aim is to facilitate a clear understanding of CBDC economics for professionals and the general public. Ripple’s 2020 report on CBDCs was one of the leading sources the CBN researchers cited.
A prominent figure in the XRP community spotlighted the development of the Ripple community in a recent post on X.
The Central Bank of Nigeria has released a report, "Economics of Digital Currencies," in which the 2020 #Ripple report on CBDCs figures rather noticably in a number of places, e.g.,https://t.co/tIR1Gxo0lY pic.twitter.com/yQFL0CWOQe
— WrathofKahneman ? (@WKahneman) October 26, 2023
CBN CBDCs Research
In the study, the Nigerian apex bank noted that the proliferation of blockchain-based currencies warranted monetary regulators worldwide to consider CBDCs. It argued that the move was in response to the risk privately issued electronic cash posed to financial systems.
Meanwhile, the CBN stated that four worldwide trends spurred central banks across the globe to explore the feasibility of introducing a CBDC. The first point it argued was that using physical currency for conducting business transactions and making payments had witnessed a prolonged decline.
As a backing to the claim, the CBN quoted a study that discovered mobile wallet payments surpassed cash payments globally for the first time in 2021. The study also suggested that by 2024, cash will only constitute 13% of in-store exchange worldwide.
Furthermore, the Nigerian apex bank mentioned that central banks are exploring digital currencies due to the growing anticipation regarding issuing government-regulated tokens amid the increasing prominence of privately controlled cryptocurrencies.
In this regard, the CBN quoted Ripple’s report. The cited report captured a recent survey of over 1,600 financial professionals from 22 countries. It found that 85% of payment industry leaders worldwide believe their countries will introduce digital tokens within the next four years.
CBN’s CBDC Initiative
It is worth mentioning that Nigeria became one of the select nations to introduce and fully enact a CBDC called the eNaira. The development took place in October 2021. The apex bank hoped introducing the eNaira would “accelerate financial inclusion, encourage cheaper and faster remittance inflows, improve monetary policy effectiveness, and enhance tax collection.”