Connect with us

Hi, what are you looking for?

[stock_market_widget type="ticker-quotes" template="chart" color="#5679FF" assets="MSFT,AAPL,NFLX,GOOG,TSLA,NFLX,AMZN" animation="true" display_currency_symbol="true" api="yf" speed="50" direction="left" pause="true"]

Crypto

Nigerian CBDC eNaira Adoption Spikes Due To Cash Shortage | Bitcoinist.com

Nigeria, the most populous African nation, experienced a severe cash shortage and these shortages have increased the adoption rate of its CBDC, the eNaira.  Nigeria is the first African nation to launch a sovereign digital currency. After the launch, the project suffered a low adoption rate from the citizens. But the recent cash shortage stemming

nigerian-cbdc-enaira-adoption-spikes-due-to-cash-shortage-|-bitcoinist.com

Nigeria, the most populous African nation, experienced a severe cash shortage and these shortages have increased the adoption rate of its CBDC, the eNaira. 

Nigeria is the first African nation to launch a sovereign digital currency. After the launch, the project suffered a low adoption rate from the citizens. But the recent cash shortage stemming from new financial policies and cash withdrawal limits has forced citizens to utilize digital solutions.

eNaira Now Gaining Relevance

Godwin Emefiele, Nigeria’s CBN governor, stated that the CBN minted over 10 billion eNaira, and nearly 3.4 billion is in circulation. Also, the Nigerian government is fueling the adoption of this digital currency, using it for payments under the Nigerian social scheme. This scheme is for poor Nigerians and has contributed 4 million new wallets.

Emefiele is bullish on digital currency, stating that it has become the preferred electronic payment channel for financial inclusion. It also serves as a social intervention plan in the Nigerian economy.

Adesoji Solanke, a Nigerian and a Director at Renaissance Capital, shared his thoughts on the eNaira. He stated that although the government wants increased adoption from the citizens, the channels are limited. He believes the main challenge is the requirements since users must possess a smart device and an internet connection.

The number of smartphone users in Nigeria will likely exceed 140 million by 2025. The rough estimate of Nigerian smartphone users is between 25 and 40 million.

Solanke stated that most people receiving the transfers are poor and might find the scheme challenging. He believes that a smart device and internet connection might be cost-intensive for these categories of people.

Nigeria And The Demonetization Policy

Nigeria’s CBN governor, Godwin Emefiele, announced that eNaira transactions in on the rise. He highlighted a 63% increase of up to 22 billion Naira ($47.7 million) in its transactions since launch.

Central Bank of Nigeria Communique No. 147 of The Monetary Policy Committee Meeting Held on Monday 20th and Tuesday 21st March 2023…https://t.co/03BXD6vrjG pic.twitter.com/LbW3y7u706

— Central Bank of Nigeria (@cenbank) March 21, 2023

Advertisement. Scroll to continue reading.

The recent demonetization policy has reduced the fiat currency in circulation within the country. The circulation amount has declined to 1 trillion Naira from its previous value of 3.2 trillion Naira in September 2022. Now, CBDC wallets have increased from October 2022 to 13 million, 12 times higher than their previous value.

Nigeria’s informal economy and trade rely on cash for around 90% of transactions and the CBN’s new monetary policies sparked widespread criticism in several quarters. The central bank initiated a cash swap for old denominations of 200, 500, and 1,000 Naira notes.

Related Reading: Alameda Research Funneled $3.2 Billion To Former FTX CEO’s Personal Circle

Due to widespread protests and chaos, the Nigerian Supreme Court ruled to uphold the old and new notes till December 2023. In Nigeria, digital currencies are a new concept, with rural areas lacking vital information. It will take more time to record mass adoption. 

Also, a previous ban on cryptocurrencies in Nigeria might have set back the entire process of digital currency adoption. Although there is relative growth in the eNaira, much sensitization is needed, especially for the uneducated.

Nigerian CBDC eNaira Adoption Spikes Due To Cash Shortage
Bitcoin to claim the 28,500 mark soon l BTCUSDT on Traidngview.com

On the bright side, the infrastructural framework for the eNaira is slowly falling into place. According to Reuters, Flutterwave, a payment portal, added the eNaira CBDC as a payment option on their platform last year.

Featured image from Pixabay and chart from Tradingview.com

Click to comment

Leave a Reply

Your email address will not be published. Required fields are marked *

You May Also Like

Mining

NAL spodumene concentrate production remains targeted for H1 2023 with revenue potential in Q3 2023. Credit: Piedmont Piedmont Lithium (Nasdaq: PLL; ASX: PLL) announced...

Stocks

SAN FRANCISCO (MarketWatch) — Among the companies whose shares are expected to see active trade in Thursday’s session are BlackBerry Ltd., Oracle Corp., and...

Tech

Over 90% of cybercrime activities that lead to financial fraud or identity theft start with an email impersonation, commonly known as phishing and spoofing....

Top Stories

Following a down year for the stock market, there is no shortage of recession predictions for 2023, especially as the Federal Reserve has signaled...

Advertisement