Check ENaira Risks,  IMF Asks Central Bank Of Nigeria

The International Monetary Fund’s ‘Nigeria Staff Report for the 2021 Article IV Consultation has disclosed the potential expansion of the use of the eNaira to cross-border fund transfers and agency bank networks could lead to new money-laundering and terrorism financing risks.

According to the report, with the launch of eNaira on October 25, Nigeria became one of the first countries in the world to introduce a Central Bank Digital Currency (CBDC) that is open to the public.

Despite the benefits, such as promoting financial inclusion, there are also some risks around the eNaira, which the Central Bank of Nigeria needs to address.

The IMF welcomed the gradual rollout of the CBDC and highlighted the need for vigilance to various risks, including monetary policy implementation, bank funding, cyber security, operational resilience, and financial integrity and stability, through regular risk assessment and contingency planning.

The IMF said, “Prospective expansion of eNaira use to cross-border fund transfers and agency bank networks may cause new money-laundering/financing of terrorism risks.”

However, the IMF has said that the CBDC is exposed to cyber security risks, unforeseen legal issues and financial integrity risks.

The IMF suggested a way out stating, “There are financial integrity risks which are mitigated by using a tiered identity verification system and applying more stringent controls to relatively less verified users.”

The Washington-based lender stressed the need for attentiveness to the different risks, urging the CBN to fix existing deficiencies in anti-money laundering laws and combat terrorism financing.


Discover more from LN247

Subscribe to get the latest posts sent to your email.

Advertisement

Most Popular This Week

LEAVE A REPLY

Please enter your comment!
Please enter your name here

This site uses Akismet to reduce spam. Learn how your comment data is processed.

More from Author

Advertisement

Read Now

BVN Compulsory for RSA Holders From Feb – PenCom

The National Pension Commission has mandated the provision of Bank Verification Numbers for all Retirement Savings Account registration and data recapture processes effective February 1. A circular signed by the PenCom Head, Surveillance Department, A.M. Saleem, stated that the move would enhance the security and integrity of the...

Price Hike: Dangote Refinery Blames Global Oil Prices

Dangote Refinery has explained why it recently adjusted the ex-depot price of Premium Motor Spirit (PMS), commonly known as petrol from N899 to N955 per litre. Dangote Refinery announced the increase in price of petrol on 17 January. Explaining the reason for the hike, Anthony Echiejina, Head of Corporate...

Nigeria Targets Export Market Of $79bn Under AfCFTA

Nigeria targets an export market of up to $79bn through the expansion of her export capacity with the African Continental Free Trade Area framework's. Minister of Industry, Trade, and Investment, Dr Jumoke Oduwole, said this at a high-level roundtable on the country’s implementation of the AfCFTA protocols in...

Discover more from LN247

Subscribe now to keep reading and get access to the full archive.

Continue reading