The International Monetary Fund (IMF) in it’s recent report has warned that the eNaira wallet may reduce deposit turnover in commercial banks in Nigeria.
This was disclosed in an IMF report titled: ‘Country Focus; Five Observations on Nigeria’s Central Bank Digital Currency.’
The IMF advised the Central Bank of Nigeria (CBN) to address the many risks connected with digital money, particularly the vulnerabilities it poses to monetary policy execution and cyber security.
Nairametrics reported that the global body said, “Like digital currencies elsewhere, the eNaira carries risks for monetary policy implementation, cyber security, operational resilience, and financial integrity and stability.
“For example, eNaira wallets may be perceived, or even effectively function, as a deposit at the central bank, which may reduce demand for deposits in commercial banks.
“Relying as it does on digital technology, there is a need to manage cyber security and operational risks associated with the eNaira.”
To mitigate potential risks, the IMF stated that steps have been taken. The report read:
“The authorities have taken measures to manage the risks. The transfer of funds from bank deposits to eNaira wallets is subject to daily transactions and balance limits to mitigate the risks of diminishing the roles of banks and other financial institutions.
“Financial integrity risks, such as those arising from the potential use of the eNaira for money laundering, are mitigated by using a tiered identity verification system and applying more stringent controls to relatively less verified users.”
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