This is even as PwC research indicates that more than 80 per cent of central banks around the world are interested in launching a Central Bank Digital Currency (CBDC) which the Central Bank of Nigeria (CBN) had already launched in the eNaira.
According to the 2022 PwC CBDC Global Index which analyses and ranks leading retail and wholesale CBDC projects, 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).
The report revealed that the past year has seen progress on a number of successful wholesale pilots, adding that 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.
It added that China became the first major economy to pilot a CBDC in 2020 with the digital yuan, and as of March 2022 pilot programs are running in 12 cities, including Beijing and Shanghai.
Speaking on the rationale for the research report, Haydn Jones, Blockchain & Crypto Specialist, PwC UK, said this year’s Index showed 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. 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.
The success of Nigeria’s eNaira is likely to spur CBDC development in countries where financial inclusion is one of the key desired outcomes,” Haydn said.
For his part, Andrew S. Nevin, West Africa Financial Services Leader and Chief Economist, PwC Nigeria, said that CBDCs will transform the payment system, as low value-added transactions become possible in a costless and secure way for everyone.
“The success could also catalyse more complex and transformative CBDC uses, including Blockchain Identity Management, Land Registry, and Supply Chain Verification. As each of the use cases develops, we can bring more people into the economic and financial system and lift tens of millions out of poverty,” Nevin said.