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Report: Nigerian CBDC Wallet Update to Enable Utility Payments, USSD Functionality to Be Added

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The Nigerian central bank digital currency (CBDC) wallet app is set for an update that will see users given the ability to pay for utilities like pay television and for topping up airtime. The addition of the unstructured supplementary service data (USSD) functionality to the wallet app means people without bank accounts will be able to make payments using the CBDC.

The Update Process

The wallet app for Nigeria’s central bank digital currency, the e-naira, is set to undergo an update that will see users being able to pay for regular utilities like pay television and airtime top-up, an official with the bank has reportedly said.

According to a Nairametrics report that quotes the official — Yusuf Abdul Jelil — the Central Bank of Nigeria (CBN) will initiate the upgrade process by sending a message to users asking them to update the wallet app. Designated the CBN’s e-naira presentative, Jelil made the remarks while attending an event at Kairo Market in Oshodi, Lagos.

“Any moment from now, there is an update coming, you will get a message on your app directing you to update your eNaira speed wallet. Once you update, those services you are asking for will be there whereby you can pay for DSTV, buy a recharge card, pay for airfare and so on,” the CBN representative said.

In the meantime, Jelil also is quoted in the report revealing how the CBN’s plan to add the USSD functionality to the wallet opens the door for non-account holders to use the CBDC. According to one financial specialist and blogger, USSD may be the best available technology that can be used to deliver mobile financial services to low-income customers.

USSD 997

Despite the CBN’s initial claims that the e-naira would be beneficial to the financially excluded, the central bank’s CBDC did not come with the USSD functionality. Having no USSD functionality means the e-naira is being used by those with access to financial services already. However, by adding the USSD code 997, the CBN is making it possible for those without bank accounts to use the CBDC.

Meanwhile, Obinna Umeh, the secretary of the Oshodi Market Union, is quoted in the report commending the central bank’s decision to inform Nigerians about the upcoming update. He said prior to Jelil’s latest communication, traders had been inundated with fake wallet app alerts.

“The CBN couldn’t have come at a better time to educate us about e-Naira; there’s almost no day we don’t have to settle disputes about fake alerts, times that we could channel into more productive things,” Umeh is quoted explaining.

What are your thoughts on this story? Tell us what you think in the comments section below.

BIS: 9 out of 10 Central Banks Worldwide Are Exploring Digital Currencies — Driven by Crypto Market

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BIS Report: 9 out of 10 Central Banks Worldwide Exploring Digital Currencies — Driven by Crypto Market Growth

Nine out of 10 central banks globally are exploring central bank digital currencies (CBDCs), according to the latest survey by the Bank of International Settlements (BIS). Furthermore, “the emergence of stablecoins and other cryptocurrencies have accelerated the work on CBDCs.”

BIS Central Bank Digital Currency Survey

The Bank of International Settlements (BIS) published a report last week titled “Gaining momentum — Results of the 2021 BIS survey on central bank digital currencies.” The report is authored by the bank’s senior economist Anneke Kosse and financial market analyst Ilaria Mattei.

The BIS CBDC survey was conducted in autumn 2021 with the participation of 81 central banks. The report describes:

Nine out of 10 central banks are exploring central bank digital currencies (CBDCs), and more than half are now developing them or running concrete experiments. In particular, work on retail CBDCs has moved to more advanced stages.

The authors explained that both the Covid-19 pandemic and “the emergence of stablecoins and other cryptocurrencies have accelerated the work on CBDCs.” This is especially true in “advanced economies, where central banks say that financial stability has increased in importance as a motivation for their CBDC involvement,” they added.

Noting that “the year 2021 was characterized by the strong growth of the cryptoassets and stablecoin market,” the report states, “On average, almost six out of 10 respondent central banks said that this growth has accelerated their work on CBDCs.” The authors continued:

This has also spurred collaboration between central banks to monitor the implications of cryptoassets and stablecoins and to coordinate regulatory approaches to contain their risks to the financial system.

In addition, many central banks revealed that they are working on wholesale CBDCs to improve cross-border payment efficiency while more than two-thirds said they are likely to issue a retail CBDC “in either the short or medium term.”

What do you think about central banks heavily exploring CBDCs? Let us know in the comments section below.

Eurosystem Seeks Providers of Prototype Payment Solutions for Digital Euro

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Eurosystem Seeks Providers of Prototype Payment Solutions for Digital Euro

Eurozone’s monetary authority, the Eurosystem, is looking to enlist financial companies willing to develop front-end solutions for the digital euro. The plan is to carry out a “prototyping exercise” this year to test transactions to the back-end developed by the regulator.

Eurosystem to Select Front-End Providers for Digital Euro Project

Within the ongoing investigation into the possible issuance of a digital euro currency, the Eurosystem intends to conduct an experiment which will, among other objectives, test end-to-end transactions with the central bank digital currency (CBDC), the European Central Bank (ECB) announced before the weekend.

The authority, which consists of the ECB and the central banks of the eurozone members, is looking for parties interested in offering front-end prototypes for the trials. Transactions will start at their front-end prototype and will be processed through the interface into the back-end, both developed by the Eurosystem.

Payment service providers, banks, and other relevant companies have been invited to participate as front-end providers of technical solutions designed to facilitate digital euro payments. The deadline for their applications is May 20. The prototyping exercise is scheduled to start in August and may continue until the first quarter of 2023.

The goal is to gather a pool of front-end providers with which the Eurosystem will cooperate in the development of user-facing prototypes, the announcement detailed. The authority will invite potential participants to explain the use cases for their prototypes. A limited number of providers, up to five the Eurosystem said, will then be selected.

They will sign contracts with the financial authorities of the eurozone and will be expected to organize the prototype development. Throughout the process, the providers will be able to share their feedback on the Eurosystem interface and back-end infrastructure, including by presenting specific data requirements to support a certain business model.

The project to launch a digital version of the common European currency entered its investigation phase in October, last year. In February, news came out that the European Commission is planning to propose a bill laying down the legal foundation for the currency early next year. Fabio Panetta, a member of the Executive Board of the ECB, recently stated that the bank is focusing its efforts on the digital euro.

Do you expect other initiatives to test the digital euro platform in the near future? Tell us in the comments section below.

Argentinian Government Advances the Creation of a National CBDC

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Argentinian

The Argentinian government has taken the first steps in the launch of its own central bank digital currency (CBDC). A new decree identified the number 207/2022 gives new faculties to the Argentinian mint to involve in the investigation, development, and issuance of digital currencies. This puts Argentina on the trail of countries like Brazil and Mexico, that are already involved in the development of their e-currencies.

Argentina Prepares the Field for a CBDC

The government of Argentina is preparing the legal field for future issuance of its own central bank digital currency, the digital peso. In a decree approved and published on April 26 with the number 207/2022, the Argentinian government modified the functions and faculties of the national mint, giving it new responsibilities and possibilities.

In these new faculties, the decree includes capture and digital processing of data, images, codes, sounds, and microchips, software design and development, implementation of digital security, teleprocessing of information, printing, and/or recording of databases.

While the national mint just had the faculties to print national currency, the new decree justifies this change by stating that:

Currently, the advancement of digital environments in terms of transactions and payments… artificial intelligence and digital governance systems, as well as the emergence and proliferation of “blockchain” technology, cryptographic technologies and assets justify the update of the reach of the national mint.

To Rosendo Gravanago, legal counselor in the crypto asset area, this is a clear move in the direction of issuing a CBDC. He stated:

This gives us the pattern that Argentina is trying to get into the CBDC trend, a trend that has been adopting centralized electronic fiduciary money.

Argentinian National Exchange and Payment Platform

Also, there are other modifications to the original purpose of the organization which hints at the future establishment of a national exchange with payment processing possibilities. In this sense, the decree allows the national mint to manage and execute payments and/or collections on behalf of third parties through the use of electronic devices, transactional platforms, or any other means.

Gravanago declared to local media that:

With this regulation, the national mint is empowered to create a kind of central exchange.

These changes put Argentina in the CBDC panorama in Latam, trailing behind countries like Brazil and Mexico that are already engaged in research and development tasks related to the future issuance of their digital currencies.

What do you think about the sets that the Argentinian government is taking towards the possible issuance of a digital peso?

Bank of Russia to Pilot Digital Ruble Settlements in 2023

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Bank of Russia to Pilot Digital Ruble Settlements in 2023

Russia’s monetary authority intends to conduct the first settlements with the digital ruble next year, its governor announced this week. Speaking to Russian lawmakers, the official highlighted the important role the new currency is going to play for Russia under sanctions.

Russia to Trial Digital Ruble in Settlements, International Payments

The full launch of the digital ruble, Russia’s central bank digital currency (CBDC), should take place before 2030, according to the approved Financial Market Development Strategy of the Ministry of Finance. However, the Central Bank of Russia (CBR) plans to begin testing it in settlements as early as 2023, its Chair Elvira Nabiullina announced in the State Duma. Quoted by Tass, she elaborated:

We quickly created a prototype of the digital ruble, now we are already testing with banks. Next year, we will pilot settlements in the real economy.

The CBR started trials with the digital ruble in January and announced the first successful transactions between individual wallets in mid-February. Five financial institutions are currently participating and in the coming months, another seven banks will join the experiments that are expected to continue throughout 2022.

The digital ruble, Nabiullina insisted, will create new opportunities for Russia, its citizens, and businesses. It will be used by the government for targeted payments to support certain sectors of the economy and the social sphere. Transfers between individuals will be free of charge, while payments for goods and services may be subject to a small commission of 0.4 – 0.7%.

Speaking to members of the lower house of parliament, the governor emphasized that the digital currency will play a special role, now when Russia is under unprecedented Western sanctions. The CBDC is expected to facilitate not only settlements inside the Russian Federation, but also cross-border payments with its partners.

The head of Bank of Russia expressed her hope that Russian deputies will adopt the necessary legal amendments to set the ground for the digital ruble’s commercial implementation. Her call comes after earlier this week, First Deputy Governor Olga Skorobogatova emphasized the importance of moving forward with the digital ruble project and assured the bank will not delay the trials.

Do you think Russia will speed up the implementation of the digital ruble? Share your expectations in the comments section below.