E-Naira

Nigeria becomes the first African nation to launch a digital currency

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Nigeria’s President Muhammadu Buhari unveiled the Nigerian Central Bank Digital Currency (CBDC), known as the eNaira, on Monday (Oct. 25) in Abuja.

The launch of the eNaira is a culmination of several years of research work by the Central Bank of Nigeria in advancing the boundaries of payments system in order to make financial transactions easier and seamless for every strata of the society, the CBN said in a statement.

Following series of engagements with relevant stakeholders including the banking community, fintech operators, merchants and indeed, a cross section of Nigerians, the CBN designed the digital currency, which was activated on Monday.

“The eNaira therefore marks a major step forward in the evolution of money and the CBN is committed to ensuring that the eNaira, like the physical Naira, is accessible by everyone. Given that the eNaira is a journey, the unveiling marks the first step in that journey, which will continue with a series of further modifications, capabilities and enhancements to the platforms” the statement read.

“The CBN will continue to work with relevant partners to ensure a seamless process that will benefit every user, particularly those in the rural areas and the unbanked population. Since the eNaira is a new product, and amongst the first CBDCs in the world, we have put a structure to promptly address any issue that might arise from the pilot implementation of the eNaira. Accordingly, following Monday’s formal launch by the President, the Bank will further engage various stakeholders as we enter a new age consistent with global financial advancement.”

Central Bank Governor Godwin Emefiele said during the launch that there had been “overwhelming interest and encouraging response”, adding that already 33 banks, over 2,000 customers and 120 merchants had already registered successfully with the eNaira platform, which is available via an app on Apple and Android.

Only three local television channels were allowed to attend the launch, and officials took no questions, according to Reuters.

Africa’s most populous nation and the continent’s biggest economy, joins the tiny Bahamas, which on Oct. 21, 2020 officially launched the world’s first national digital currency, the sand dollar, the digital version of the Bahamian dollar (B$).

Central bank-backed digital currencies or CBDCs and cryptocurrencies are both virtual money though the CBDCs are legal tender regulated by central banks while cryptos are out of government control.

Nigeria ranked seventh in the 2021 Global Crypto Adoption Index compiled by research firm Chainalysis.

Nigeria’s central bank in February sought to control the use of cryptocurrencies by ordering local banks to close accounts that were involved in such transactions.

In March, the dollar volume of cryptocurrencies sent from the Africa’s largest oil producer rose to $132 million, up 17% from the previous month, according to Chainalysis. Transactions in June were 25% above the same month last year.