The International Monetary Fund (IMF) warns Nigeria that the eNaira could get compromised by fraudsters and used for money laundering and terrorism financing.
The International Monetary Fund said the risks are imminent and could entail lawsuits.
These risks are despite the many benefits of the eNaira such as financial inclusion.
The Central Bank of Nigeria (CBN) was therefore urged to quickly address the problems.
The warning is contained in a new report issued by the IMF with following the conclusion of its 2021 Article IV Consultation with the West African country.
According to the IMF, the risks are imminent and could entail lawsuits. And this is despite the many benefits of the eNaira such as financial inclusion and the potential for easy cross-border fund transfers. It therefore recommended some solutions, stressing the need for the Central Bank of Nigeria to quickly address the perceived problems.
Part of the report by 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… 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.
Recall that in October 2021, Nigeria became the first African country to launch a central bank digital currency and one of the first in the
world. Since then, other countries are considering doing same. In December 2021, Governor of the Bank of Tanzania Florens Luoga disclosed that plans by the East African country’s digital currency are underway.
