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Central bank digital currency in Nigeria: opportunities and risks

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  • Ozili, Peterson K

Abstract

This paper discussed the opportunities and risks of central bank digital currency (CBDC) in Nigeria, also known as the eNaira or e-Naira. The opportunities which CBDC present to Nigeria include, improved monetary policy transmission, efficient payments and increased financial inclusion. Some of the identified risks include rising digital illiteracy, increased propensity for cyber-attacks, data theft, and the uncertain role of banks in a full-fledged CBDC economy. This article contributes to the literature by evaluating the pros and cons of fiat digital currency such as a central bank digital currency.

Suggested Citation

  • Ozili, Peterson K, 2021. "Central bank digital currency in Nigeria: opportunities and risks," MPRA Paper 110152, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:110152
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    References listed on IDEAS

    as
    1. Davoodalhosseini, Seyed Mohammadreza, 2022. "Central bank digital currency and monetary policy," Journal of Economic Dynamics and Control, Elsevier, vol. 142(C).
    2. Michael D. Bordo & Andrew T. Levin, 2017. "Central Bank Digital Currency And The Future Of Monetary Policy," Economics Working Papers 17104, Hoover Institution, Stanford University.
    3. Ozili, Peterson K, 2021. "Central bank digital currency can lead to the collapse of cryptocurrency," MPRA Paper 111218, University Library of Munich, Germany.
    4. David Andolfatto, 2021. "Assessing the Impact of Central Bank Digital Currency on Private Banks," The Economic Journal, Royal Economic Society, vol. 131(634), pages 525-540.
    5. Walter Engert & Ben Fung, 2017. "Central Bank Digital Currency: Motivations and Implications," Discussion Papers 17-16, Bank of Canada.
    6. Amber Wadsworth, 2018. "The pros and cons of issuing a central bank digital currency," Reserve Bank of New Zealand Bulletin, Reserve Bank of New Zealand, vol. 81, pages 1-21, June.
    7. Grym, Aleksi & Heikkinen, Päivi & Kauko, Karlo & Takala, Kari, 2017. "Central bank digital currency," BoF Economics Review 5/2017, Bank of Finland.
    Full references (including those not matched with items on IDEAS)

    Citations

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    Cited by:

    1. Kwami Ahiabenu, 2022. "A Comparative Study of the Design Frameworks of the Ghanaian and Nigerian Central Banks’ Digital Currencies (CBDC)," FinTech, MDPI, vol. 1(3), pages 1-15, August.
    2. Ozili, Peterson K, 2021. "Central bank digital currency can lead to the collapse of cryptocurrency," MPRA Paper 111218, University Library of Munich, Germany.
    3. Ozili, Peterson K, 2022. "Can central bank digital currency increase financial inclusion? Arguments for and against," MPRA Paper 110786, University Library of Munich, Germany.

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    More about this item

    Keywords

    central bank digital currency; eNaira; blockchain; cryptocurrency; central bank; CBDC; bitcoin; payment system; fiat digital currency; distributed ledger; Nigeria.;
    All these keywords.

    JEL classification:

    • E51 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Money Supply; Credit; Money Multipliers
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • E59 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Other
    • G18 - Financial Economics - - General Financial Markets - - - Government Policy and Regulation
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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