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CBN to expand eNaira use for govt payments, MDAs transactions

The Central Bank of Nigeria intends to expand the use of its digital currency, eNaira, to facilitate payments into government accounts and allow Ministries, Departments, and Agencies to process vendor and beneficiary payments.

This initiative is detailed in the CBN's recently released Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines for Fiscal Years 2024–2025.

In accordance with the statute, "the CBN shall continue to work towards enabling the use of eNaira Wallet/Channels by payers to pay into government accounts at the CBN, and, allow Ministries, Departments and Agencies (MDAs) to initiate vendor/beneficiary payments from their respective eNaira Wallets."

This development is part of the Central Bank of Nigeria's ongoing efforts to increase eNaira adoption in the public and private sector.

In addition to making payments easier, the CBN's guidelines outline other improvements to eNaira.

These include working with both the federal and state governments to increase adoption and deploying eNaira version 2.0, which aims to increase the participation of deposit money banks in its use.

Other planned eNaira features include offline functionality and programmable money, which will improve its integration with both online and offline government activities.

The document stated that "the CBN issues and regulates the eNaira, a digital form of the fiat currency." The eNaira provides several benefits, including faster and cheaper payments, increased financial inclusion, and reduced fraud, among others.

"The Central Bank of Nigeria will continue to work on improving the eNaira and increasing its adoption. This includes the deployment of eNaira version 2.0, with a focus on wholesale Central Bank Digital Currency (CBDC) to increase deposit money banks' participation and empower them to drive its adoption; the implementation of offline functionality, programmable money; and increased collaboration with the federal and state governments to increase its adoption."

Nigeria's Central Bank Digital Currency, eNaira, was introduced in October 2021 as part of the country's efforts to increase financial inclusion. The digital naira is expected to bolster the Central Bank of Nigeria's cashless policy by encouraging more widespread use of digital payments.

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