More Proactive Push Needed For Central Bank Digital Currencies – IMF   

The head of the International Monetary Fund (IMF) has urged countries to make a more proactive push to develop Central Bank Digital Currencies (CBDCs). Eleven countries, including a number in the Caribbean, and Nigeria, have already launched CBDCs. Around 120 others are exploring them, although progress and approaches differ widely and a few have even abandoned the idea altogether. “We may be at a point where the public sector needs to offer a little more guidance,” IMF Managing Director Kristalina Georgieva said in a speech in Singapore. “Not to crowd out, not to disrupt,” she added. “But to act as a catalyst, to ensure safety and efficiency – and to counter fragmentation.” She made her remarks as the IMF published the first instalment of a “virtual handbook” on CBDCs, designed to help countries with the design and set-up process and ensure that the new technologies are globally interoperable. Supporters say CBDCs will modernise payments with new functionality and provide an alternative to physical cash, which seems in terminal decline. But questions remain as to why they represent an advance when current systems are already capable of many of the proposed benefits, and countries such as Nigeria that have already launched CBDCs are seeing very low uptake among the public. Georgieva said that with technology advancing so rapidly, countries needed to push ahead with development now to avoid getting caught out in future. “If anything, we need to raise another sail to pick up speed,” she said, likening the efforts to a nautical journey. “The world is changing faster than most imagined”.

Digital Payments, Key To Microfinance Banking Growth, Innovation, Experts Say

Leaders and experts in the financial technology sub-sector have said digital payments hold the key to the success and stay of Nigeria microfinance banking sector of the country’s economy. The experts spoke at Africa’s leading integrated payments and digital commerce company, Interswitch TechConnect event held in Port-Harcourt where they explored the transformative impact of digital payments in the microfinance sector. Keynote speaker and Group Head, Financial Services Business, Digital Infrastructure & Managed Services (Interswitch Systegra) Tyoyila Aga emphasized the pivotal roles latest trends in digital payment solutions, such as mobile wallets, QR codes, and contactless payments play in shaping the future landscape of microfinance banking. Aga noted that digital payments innovation is big for the microfinance sector as it comes with opportunities for growth, and ultimately, financial inclusion, hence the reason Interswitch is at the forefront of driving the growth of digital payments across the country and beyond. He said, “We are excited to have come this far in propagating the good news around what digital payment innovation holds for our microfinance sector. At Interswitch, we are all about innovation and as a company committed to driving the digital transformation of Nigeria’s financial services, we are proud to play a leading role in shaping the future of microfinance banking.” Attendees who spoke to our correspondent said they gained valuable insights into the technological advancements that are revolutionizing financial services and the potential these innovations hold for financial inclusion and economic empowerment. The event also featured panel discussions, where industry leaders engaged in conversations on different strategies for growth in the microfinance sector, sharing their perspectives on leveraging digital technologies to drive growth in the financial sector. The discussion covered topics ranging from cybersecurity and regulatory compliance to the integration of emerging technologies, providing attendees with a comprehensive understanding of the multifaceted aspects of digital transformation.

Inadequate Infrastructure, Bane Of e-Payments in Nigeria -Fintech Experts

Experts in Nigeria’s Fintech industry have said that the major challenges facing electronic payments in Nigeria is the inadequacy of infrastructure, including operational and telecommunications facilities, as well as reliable electricity supply. They opined the need for stakeholders in the financial industry to work together and extend e-payments channels across the country as well as finding solutions to the growth of fraudulent activities in the system. Chief Finance Officer Parthian Partners, Yinka Arewa while making presentation on the “Collaboration, Key to tackling challenges facing E-PAYMENT System in Nigeria, said many e-payment systems depend on stable power sources and robust IT infrastructure, such as laptops, mobile phones, POS terminals, and dependable internet connectivity.  He said during the period of cash scarcity earlier this year, banks faced unprecedented e-payment failures, prompting the urgent need for technological infrastructure upgrades.  He said the failure of e-payment channels on such a scale compelled customers to wait for banks’ networks to stabilize before completing their transactions while the FinTech companies, initially considered a lifeline, also encountered challenges due to increased pressure.  He pointed out that the recent events, such as the implementation of the cashless policy following the Naira redesign late last year/early this year, highlighted the challenges associated with the country’s transition to a cashless economy He said the issue of failed transactions has persistently affected numerous businesses reliant on electronic payment systems.  He stated that the rapid growth in financial technology has broken down geographical barriers, introduced innovative approaches, and ushered in numerous advancements, but at the same time has exposed us to unprecedented risks, including cybercrime. He pointed out that cybercrime poses severe societal and economic consequences, ranging from facilitating corruption, money laundering, and military espionage to terrorism, all of which undermine technological and socio-economic development.  Speaking further, he said Cybercrime’s impact on customers is substantial, as everyone desires the safety and security of their hard-earned money. Trust is the linchpin of finance, and no one wishes to witness their funds vanish. Security concerns stemming from electronic fraud and cyberattacks are real. The automated nature of payments without direct interaction between the payer and payee renders e-payments vulnerable and with the proliferation of digital financial activities, cyber threats are expected to rise” But despite all these challenges, he said In 2022, Nigeria unlocked $3.2 billion in additional economic output through the development and utilization of electronic payments, particularly real-time payment services.  “Electronic payments continue to attract substantial global investments and have exhibited the highest returns and growth within the sector over the past decade.  Indeed, Nigeria has witnessed a remarkable digital transformation, with over 100 million active mobile phone users as of 2023. “This statistic signals the advent of a fully digitized financial services sector. However, despite these advancements, Nigeria’s payment system predominantly relies on cash.”  Managing Director, Nigerian Inter Bank Settlement Systems (NIBSS), Premier Oiwoh, called for stakeholders’ partnership to extend e-payment channels across the country.  He said that such partnership will, in addition to wider coverage, help to checkmate abuses, dispense errors, instant resolution of errors as well as update technological resources in delivering first-class e- payment across the country.  Oiwoh who was represented by the Divisional Head, Enterprise Support NIBSS Bola Onigbokan, said: “Collaboration is mandatory; it is not a choice, adding that as we have gathered here doing our workshop planning how to move forward, the fraudsters are also brainstorming and strategizing on how to operate and often times, they are even ahead of us. I think that is even why we are even having this discussion today.” He assured Nigerians that the national payment infrastructure of NIBSS, owned by banks, were committed to ensuring seamless transactions, customer protection, and the improvement in technologies driving e-payment systems.

CBN opens FX price verification system portal

*Vows to sanction infractors   In a bid to address the constraints that has bedeviled the foreign exchange market, the Central Bank of Nigeria has introduced a foreign exchange price verification system, specifically for importers to access forex. The portal is scheduled to begin on August 31, 2023. The CBN’s Trade and Exchange Department said in statement that the price verification report from the portal is now mandatory for all ‘Form M’ requests. “Following the successful conduct of the pilot run and various trainings held with all the banks, the Central Bank of Nigeria hereby announces the Go- Live of the Price Verification System (PVS),” the statement reads. “All applications for Forms M shall be accompanied by a valid price verification report generated from the price verification portal. “For the avoidance of doubt, by this circular, the price verification report has become a mandatory trade document precedent to the completion of a Form M,” the statement said. The Apex Bank insisted that it would not fail to sanction any case of infraction. “Please, ensure compliance,” the Bank said.

24 Central Banks will have digital currencies by 2030 – Survey

A survey by the Bank for International Settlements (BIS) shows that 93 percent of central banks are already researching Central Bank Digital Currencies (CBDCs). According to the survey, there could be up to 15 retail and nine wholesale CBDCs in circulation by 2030.According to a survey, over half of the world’s central banks are conducting experiments or working on a CBDC pilot. Almost a quarter of all central banks are already piloting their retail CBDC projects, and the number of wholesale CBDCs in the works is much lower.Geoeconomically, nations within emerging markets and developing economies are leading CBDC adoption. Their share in piloting the retail (29 per cent) and wholesale (16%) CBDCs almost doubled that of advanced economies, which stands at 18 per cent and 10 per cent, respectively.Both developing and advanced economies mostly share the motivation behind their CBDC projects — financial stability and cross-border payments efficiency. However, developing countries are more often driven by financial inclusion reasons. The share of central banks likely to issue retail CBDC within the next three years grew from 15 per cent to 18 per cent in 2022. At the same time, 68 per cent of central banks still state their unreadiness to issue retail CBDC “any time soon.”So far, there are still only four CBDCs in circulation: in the Bahamas, the Eastern Caribbean, Jamaica and Nigeria. Yet, based on the central bankers’ answers, the survey predicts 15 retail and nine wholesale CBDCs will be live by the end of the decade.At the end of June, the Reserve Bank of India reported ongoing negotiations with at least 18 central banks worldwide regarding the possibility of cross-border payments via its CBDC, the “digital rupee.” In July, the Federal Reserve Bank of New York’s Innovation Center completed its proof-of-concept of a regulated liability network for a CBDC.