Nigerian CBDC Still Not Widely Used a Year After Launch – Emerging Markets Bitcoin News

On October 25, Nigeria commemorated the first anniversary of the Central Bank of Nigeria’s e-naira, even as more residents continue to snub the digital currency. The central bank offers a discount of 5% to all motorized ricksha drivers and those who use the CBDC. Kingsley Obiora, a deputy governor at the CBN, suggested that the digital currency needs “a little push from the government” if it is to be widely embraced.

E-Naira Phase 2 Rollout

As Nigeria commemorated the e-naira’s first anniversary on October 25, critics have claimed that the average Nigerian has still not embraced Africa’s first central bank digital currency (CBDC). They point to the e-naira wallet’s relatively low number of downloads as well as the still-growing use of cryptocurrencies when remitting funds or making cross-border payments.

Bitcoin.com News published in August that peer-to-peer Bitcoin trading volumes alone on Paxful amounted almost $400 million between January and June. It is nearly half of the total $760 million recorded during 2021. According to Paxful, Nigerians were resorting to cryptocurrencies and peer-to-peer trading platforms because they provide “an opportunity for financial inclusion.”

However, despite Nigerians’ apparent disregard for the CBDC, the Central Bank of Nigeria is projecting an 8x increase in downloads of enaira wallets. Bitcoin.com News previously reported that this central bank has a number of measures in place to make it possible. These include the enabling of unstructured additional service data (USSD), which is a functionality available to the wallet application.

Flutterwave is a Fintech giant that the CBN engaged to provide payment services. Flutterwave has added the enaira in its payment options for merchants. As part of its efforts to increase the CBDC’s use, the CBN is now offering drivers and passengers on motorized scooters paying with the enaira a 5% discount.

According to a statement released by Bitt — the CBN’s technology partner — the onboarding of banked customers and merchants is consistent with phase two activities of the central bank’s staggered rollout of the CBDC. In the third stage, the CBN said it will seek to onboard the “Nigerian Trade and Exchange platform.” This phase will also include “sector-specific tokens for grants and subsidies” as well as “programmable payments for e-naira payment scenarios.”

CBN Optimism is not shared by all

Remarking on the occasion to mark the CBDC’s anniversary, Brian Popelka, the CEO of Bitt said:

Africa has had many firsts this year. As the first, you have the ability to set the example for other countries and find the solutions. Today’s one-year milestone is an exceptional achievement for both the Central Bank of Nigeria and Bitt teams. We look forward to continued partnership on this CBDC deployment journey and to provide additional features to expand eNaira’s value to all Nigerians and everyone, everywhere.

However, Popelka and the CBN’s optimism is not shared by everyone. Adesoji Solanke, director at Renaissance Capital’s investment bank, is one of the critics. Solanke hopes that, with Nigeria experiencing ongoing currency shortages, the e–naira will be an alternative to depreciating Naira.

In remarks published by Bloomberg, Solanke insisted the CBN’s digital currency “does not address any of these basic use cases, so no surprise at its low adoption rates so far.”

Meanwhile, Kingsley Obiora, a deputy governor at the CBN, is quoted in the report suggesting that “a little push from the government” is needed if the CBDC is to take off. Josh Lipsky, director of the Atlantic Council’s Geoeconomics Center, reportedly said both the central bank and government must be involved in efforts aimed at helping more Nigerians become acquainted with the CBDC.

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Terence Zimwara

Terence Zimwara was a Zimbabwe award-winning journalist and author. His writings have covered the economic problems of several African countries and how digital currency can offer an escape route.