eNaira: Nigeria Rolls Out Africa’s First Central Bank Digital Currency
Nigeria’s CBCD (Central Bank Digital Currency) is now live following the announcement made by Nigeria’s President Muhammadu Buhari on Monday, October 25.
Buhari led the launch of the country’s Central Bank Digital Currency, popularly known as “eNaira”.
President Buhari stated during the official rollout exercise that the national digital currency is designed to complement Nigeria’s physical currency, not replace it.
As per the official announcement, eNaira aims at “advancing the boundaries of the payments system to make financial transactions easier and seamless.” The national CBDC aims to be the only digital currency that is legal tender in Nigeria and will be accepted alongside physical cash and complemented by an official mobile wallet application.
As a result, President Buhari said during the rollout event that the CBDC and the blockchain technology it uses can facilitate economic growth and develop the GDP of Africa’s largest economy by $29 billion over the next 10 years.
Meanwhile, during the official launch, Nigeria’s Central Bank Governor Godwin Emefiele stated that some 500 million eNaira ($1.21 million) have already been minted following the CBDC going live.
The digital currency uses two applications (eNaira merchant wallet and eNaira speed wallet), which are available for download from the Apple and Google app stores.
The eNaira was developed by fintech firm Bitt, whose digital currency management system (DCMS) is also behind the Eastern Caribbean Central Bank’s CBDC. Surely, eNaira uses Hyperledger Fabric, an approved blockchain service being provided by IBM to enable transaction settlement.
The launch of the eNaira was originally slated to take place on October 1 but was delayed to allow for the attendance of the 61st anniversary of Nigeria’s independence that happened the same day.
The official rollout of the eNaira comes only a few months after Nigeria’s Central Bank ordered a ban on other cryptocurrency activities in the country.
Nigeria’s Central Bank and government have struggled with the rise of private cryptocurrencies in the nation, leading to a ban on crypto transactions within the banking sector in February. Four months later, the authorities announced plans to roll out the eNaira, which eventually led to the actualization of an official launch of the national digital currency on Monday, October 25.
CBDCs gain popularity
Central bank digital currencies are gaining popularity across the world as Central Banks globally are looking to develop their own digital currencies, which use technology to represent a nation’s official currency in digital form.
Nigeria is the first nation in Africa to officially launch a sovereign digital currency, and therefore the country joins China and the Bahamas as early pioneers of official CBDCs.
The Bahamas became the first nation to launch its CBDC in October 2020. In April this year, South Korea, Sweden, Indonesia, Japan, and Norway announced their digital currency trials. So far in Africa, South Africa, Kenya, Egypt, Morocco, and Ghana are examining the feasibility of the technology.
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