Nigeria to Partner with New York-Based Firm to Revamp its E-naira
- Nigeria is among the over 90 countries exploring the use of CBDCs.
- CBDCs are facing intense opposition from activists, who refer to them as “surveillance” tools.
- Nigeria’s e-naira has seen little adoption since its launch in 2021.
The Central Bank of Nigeria (CBN) is reportedly seeking a new system for its digital currency, the e-naira. More than a year after its launch, the e-naira has seen little adoption, and the CBN is in early-stage talks with New York-based blockchain firm R3.
According to a Blomberg article, the CBN intends to “develop its own software for the digital currency so that it can keep full control of the effort.” Nigeria launched its eNaira in 2021 in partnership with the financial software company Bitt. As of last year, the CBN claimed the e-naira had been used for $10 million worth of transactions.
The CBN’s new partner won’t immediately replace Bitt but will assist in gradually giving the Nigerian central bank complete power. Bitt acknowledged in a statement that the CBN collaborates with a number of partners on technical developments. It noted that it still works alongside the CBN and that new features and enhancements are currently being developed for the e-naira system.
Nigerians Prefer Bitcoin to the E-naira
Nigeria’s launch of a CBDC was viewed as a significant advancement for the West African nation. But Nigerians showed little interest in it. Statistics show that one in 200 Nigerians use the e-Naira. This translates to less than 0.5% of the population. In addition, within the first eight months after the e-naira launched, only 700,000 users had created e-naira wallets.
The CBN developed new policies to drive adoption. The regulator first provided a 5% discount on e-Naira payments in the country’s local transportation system. The CBN also set a cap on the amount of money citizens could withdraw. Nigeria’s Central Bank Governor, Godwin Emefiele believes a cashless society would increase the adoption of the e-naira.
The cashless policy of the CBN has an impact on more than 200 million Nigerians. Interestingly, Nigerians choose to use Bitcoin for transactions rather than e-naira. According to reports, Google searches for “how to buy bitcoin” have increased. Nigerians increased their demand for bitcoin in reaction to the CBN’s cashless program.
Nigeria sees approximately 75k searches about Bitcoin per day, making it one of the highest in the world. Google searches show that Bitcoin is a more preferred choice among Nigerians than the e-naira.
Nigeria is one of over 90 countries exploring the use of CBDCs. Countries such as Russia and Japan are reportedly set to launch their CBDCs before the summer. San Francisco is similarly considering the possibility of setting up a CBDC system.
Lawrence has covered some exciting stories in his career as a journalist, he finds blockchain-related stories very intriguing. He believes Web3 will change the world and wants everyone to be a part of it.
