As Nigeria adopts hasty and excruciating routes to move from a predominantly cash based society to a cashless one, Britain, its erstwhile colonial overlord with more experience and muscles in banking, is still vacillating on how to go about the financial reform.
UK is now considering bringing forward consultation on its central bank digital currency programme “in the coming weeks,” the Chancellor of the Exchequer, Jeremy Hunt has said.
The Bank of England (BOE) will also soon release a paper setting out technology considerations informing the potential build of a digital pound, Hunt said in a written statement to Parliament last weekend.
He announced the plan as part of a wider set of reforms to spur the UK’s financial services industry.
However, a UK parliamentary panel, the House of Lords Economic Affairs Committee said earlier this year that officials have given no convincing reason it is needed.
The group, which includes former BOE Governor Mervyn King, said at the time that the project might threaten the stability of the banking system and inject the Bank Of England into controversial debates on privacy.
One concern is that it could allow the state to have greater surveillance of people’s spending choices.
BOE officials led by Deputy Governor Jon Cunliffe have become increasingly vocal about the need for so-called central bank digital currencies, or CBDC, which would give consumers and businesses a form of money that’s as safe as cash but usable in online transactions.
They note a sharp drop in the use of cash is leaving money increasingly controlled iby private companies that don’t have the explicit government guarantee carried by banknotes and coins.
Meanwhile, the Central Bank of Nigeria in October, 2022 decided to replace all high-denomination cash bills in the economy with the aim of shifting Nigerians to use less cash.
CBN had also in October hinted that it will significantly reduce the quantity of higher denomination notes (N500 and N1,000) it will print going forward.
Information reaching THE STATEPOST revealed that the CBN is in a race with other central banks around the world to institutionalise Central Bank Digital Currency (CBDC).
114 countries, representing over 95 percent of global GDP, are exploring a CBDC while the Bank of England is tinkering with the idea of the digital pound.
Nigerian government's hasty methods at going digital is now not only hampering economic activities in the country, it has reduced drastically the raw cash in circulation thereby reducing the spending power of the people.
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