by Jude Ayua

Central Bank of Nigeria (CBN)’s Governor Mr. Olayemi Cardoso, recently unveiled two innovative digital payments solutions to aid the CBN’s operations. The Document Flow (DocFlow) System and the Ministries, Departments, and Agencies (MDAs) Naira Payment Solution. The launch, held at the CBN Head Office in Abuja, is part of the Bank’s digital revolution project, tagged “Digital First,” which the Governor initiated in December 2023, TVC News reported.

Mr. Cardoso described the DocFlow system as a platform designed to digitize the CBN’s document management processes, which aims to reduce reliance on paper, enhance efficiency, and expedite approvals.

The Ministries, Departments, and Agencies (MDAs) Naira Payment Solution automates cash withdrawal processes for government agencies, improving the efficiency of financial transactions and MDAs support.

CBN’s digitization efforts

Commenting on the launch of the initiatives, CBN Deputy Governor Emem Usoro emphasized the Bank’s commitment to operational excellence through automation and innovation. Usoro further highlighted the benefits of the MDAs Naira Payment Solution, including improved service delivery, reduced errors, and enhanced fraud mitigation. 

Mrs. Jide-Samuel, Acting Director, CBN’s Information Technology Department and project lead, observed the payment solutions align with the Bank’s mission of “Excellence in Central Banking Operations.” Jide-Samuel added the MDAs payment solution has already undergone successful testing with select MDAs in Nigeria. The system is anticipated to reduce payment turnaround times by 70 percent, to boost Nigeria’s financial system.

The launch of the payment systems shows the CBN’s commitment to leveraging technology to enhance efficiency, stakeholder satisfaction, and the overall effectiveness of the nation’s financial ecosystem. 

Mr. Cardoso commended both solutions, developed entirely in-house, for their cost-saving and sustainability-focused approach. He reaffirmed his continued commitment to initiatives that will advance service delivery, operational efficiency, and technological innovation.

Read also: Finally, ‘crypto ban’ in Nigeria lifted by the CBN.

Cryptocurrency policies

As Nigeria’s chief financial regulator, the CBN has taken significant actions with respect to cryptocurrencies in the country. In 2017, the bank issued an advisory warning the public about the risks associated with cryptocurrencies. In an unfortunate and unexpected turn of events, the CBN issued a directive restricting banks and other financial institutions from facilitating cryptocurrency transactions in February 2021. However, in August 2023, the Bank lifted its 2021 restrictions.

Although the CBN’s restrictive stance on cryptocurrency changed, the Bank has not taken any proactive policy measures regarding cryptocurrencies. While Nigeria’s Securities and Exchange Commission (SEC) has assumed a central role in crypto assets regulation by classifying them as securities, the CBN is still lagging. The SEC introduced Rules for virtual asset service providers (VASPs) in 2022, which classified crypto assets as securities, requiring VASPs to obtain a license to operate within Nigeria. The SEC issued provisional licenses to two digital asset exchanges in August 2024.

Read also: As CBN Lifts Restrictions on a List of Crypto Trading Accounts: Prospects for Nigeria’s Crypto Industry.

Notwithstanding, the CBN’s Financial Intelligence Unit (NFIU) has been instrumental to implementing the Financial Action Task Force (FATF) recommendations in the country. Following the FATF’s blacklisting of Nigeria in 2023, the government introduced the Money Laundering (Prevention & Prohibition) Act which empowered the NFIU to implement anti-money laundering and counter financing of terrorism (AML/CFT) measures to align Nigeria with FATF recommendations. In November 2024, the NFIU recorded a milestone in this regard by moving five points higher in the recommendations.

As the CBN makes progress toward digitization of the payment system in Nigeria, the Bank should also be proactive in digital assets regulation by introducing clear rules, such as classifying them as the SEC has done. This will give people more confidence and boost digital assets adoption for financial inclusion, which aligns with the CBN’s goal for the eNaira, the CBN’s digital currency.

Read also: NFIU confident Nigeria will exit the FATF grey list in 2025.      

 

 

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Jude Ayua is a policy analyst at CAB. A lawyer, Jude is an associate at Infusion Lawyers where he is a member of the Blockchain & Virtual Assets Group. He is also a member of the Policy & Regulations Committee of the Stakeholders in Blockchain Technology Association of Nigeria (SiBAN). Jude reports and writes on crypto policy and regulations. jude@infusionlawyers.com