Nigeria on Monday became the first African nation to launch a digital currency – the eNaira – a move its leaders said will expand access to banking, enable more remittances and even grow the economy by billions of dollars.
Africa’s most populous nation joins the Bahamas, the first to launch a general-purpose central bank digital currency, known as the Sand Dollar, in October. China has ongoing trials and Switzerland and the Bank of France have announced Europe’s first cross-border experiment.
But experts and cryptocurrency users in the continent’s biggest economy say the fact that there are more questions than answers regarding the eNaira – and a large amount of worry over the consistency of Central Bank (CBN) rules – means the government faces a tough path to make the eNaira a success.
Central Bank Governor Godwin Emefiele said during Monday’s launch that there had been “overwhelming interest and encouraging response”, adding that 33 banks, 2,000 customers and 120 merchants had already registered successfully with the platform, which is available via an app on Apple and Android.
Some 200 million nairas’ worth of eNaira, which will maintain parity with the traditional currency, has been issued to financial institutions, he said. President Muhammadu Buhari said use of the currency could grow the economy by $29 billion over ten years, enable direct government welfare payments and even increase the tax base.
Nigeria’s young, tech-savvy population has eagerly adopted digital currencies. Cryptocurrency use has grown quickly despite a Central Bank ban in February on banks and financial institutions dealing in or facilitating transactions in them.
Nigeria ranked seventh in the 2021 Global Crypto Adoption Index compiled by research firm Chainalysis.
