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eNaira central bank digital currency (CBDC) for financial inclusion in Nigeria

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  • Ozili, Peterson K

Abstract

There is much interest in central bank digital currency (CBDC) among central banks around the world. African countries have also joined the league of nations that are conducting research into CBDC. The launch of the eNaira CBDC in Nigeria has drawn substantial interest from observers around the world including central banks. The eNaira CBDC is envisaged to bring many benefits, and financial inclusion is considered to be one of such benefits. This paper explores the eNaira CBDC and its potential to increase financial inclusion in Nigeria. I show that the eNaira CBDC can increase financial inclusion by (i) offering an easy account opening process for greater financial inclusion (ii) enabling digital access to diverse financial services in the financial system, (iii) offering low-cost financial products and services, (iv) avoiding unexplained bank charges that causes financial exclusion, (v) attracting people who have lost confidence in banks, (vi) introducing interest-bearing eNaira, and (vii) using offline channels to access the eNaira.

Suggested Citation

  • Ozili, Peterson K, 2023. "eNaira central bank digital currency (CBDC) for financial inclusion in Nigeria," MPRA Paper 115781, University Library of Munich, Germany.
    • Handle: RePEc:pra:mprapa:115781
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    File URL: https://mpra.ub.uni-muenchen.de/115781/1/MPRA_paper_115781.pdf
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    References listed on IDEAS

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    1. Andrea Baronchelli & Hanna Halaburda & Alexander Teytelboym, 2022. "Central bank digital currencies risk becoming a digital Leviathan," Nature Human Behaviour, Nature, vol. 6(7), pages 907-909, July.
    2. Brunnermeier, Markus K. & Niepelt, Dirk, 2019. "On the equivalence of private and public money," Journal of Monetary Economics, Elsevier, vol. 106(C), pages 27-41.
    3. Allen, Franklin & Gu, Xian & Jagtiani, Julapa, 2022. "Fintech, Cryptocurrencies, and CBDC: Financial Structural Transformation in China," Journal of International Money and Finance, Elsevier, vol. 124(C).
    4. Michael D. Bordo & Andrew T. Levin, 2017. "Central Bank Digital Currency and the Future of Monetary Policy," NBER Working Papers 23711, National Bureau of Economic Research, Inc.
    5. Paulo Rupino Cunha & Paulo Melo & Helder Sebastião, 2021. "From Bitcoin to Central Bank Digital Currencies: Making Sense of the Digital Money Revolution," Future Internet, MDPI, vol. 13(7), pages 1-19, June.
    6. Adrián Armas & Lucero Ruiz & José Luis Vásquez, 2022. "Assessing CBDC potential for developing payment systems and promoting financial inclusion in Peru," BIS Papers chapters, in: Bank for International Settlements (ed.), CBDCs in emerging market economies, volume 123, pages 131-151, Bank for International Settlements.
    7. Firdous Ahmad Malik & D. K. Yadav, 2022. "Financial Inclusion Schemes in India," Springer Books, Springer, number 978-981-19-1316-7, January.
    8. Mohammad Davoodalhosseini & Francisco Rivadeneyra & Yu Zhu, 2020. "CBDC and Monetary Policy," Staff Analytical Notes 2020-4, Bank of Canada.
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    Cited by:

    1. Arno J. van Niekerk, 2024. "Economic Inclusion: Green Finance and the SDGs," Sustainability, MDPI, vol. 16(3), pages 1-21, January.
    2. Xin, Baogui & Jiang, Kai & Santibanez Gonzalez, Ernesto D.R., 2024. "The coevolution effect of central bank digital currency and green bonds on the net-zero economy," Energy Economics, Elsevier, vol. 134(C).
    3. Ozili, Peterson K, 2024. "Thinking Fast and Slow about Central Bank Digital Currencies," MPRA Paper 120774, University Library of Munich, Germany.

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    More about this item

    Keywords

    Nigeria; eNaira; central bank digital currency; CBDC; financial inclusion; eNaira wallet.;
    All these keywords.

    JEL classification:

    • E50 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - General
    • E52 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Monetary Policy
    • E58 - Macroeconomics and Monetary Economics - - Monetary Policy, Central Banking, and the Supply of Money and Credit - - - Central Banks and Their Policies
    • G21 - Financial Economics - - Financial Institutions and Services - - - Banks; Other Depository Institutions; Micro Finance Institutions; Mortgages

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