Nigeria to Launch Digital Currency “e-naira” in October

The central bank of Nigeria has confirmed it will test the “e-naira”, a Central Bank Digital Currency (CBDC), as early as October.

According to an article by Reuters, Nigeria’s Central Bank (CBN) governor Godwin Emefiele announced on July 27 that it would be launching its own cryptocurrency, called the e-naira.

Emefiele stated that the e-naira would operate as a wallet against which customers could hold existing funds in their bank account. The CBDC aspires to help Africa’s largest economy with financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social intervention.

Before the end of the year, the Central Bank will be making special announcements and possibly launching a pilot scheme in order to be able to provide this kind of currency to the populace.

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Rakiya Mohammed, information technology specialist, CBN

CBN information technology specialist Rakiya Mohammed added that the bank wants the digital currency to make remittances more accessible for Nigerians working abroad. (Nigeria was ranked in the top 10 remittance receivers globally in 2020.)

Mohammed also stated that the CBN had given due consideration to the architecture, accessibility issues and privacy of the currency, which is being built on the Hyperledger Fabric blockchain.

Crypto Usage Booms in Nigeria

In February, Nigeria’s central bank implemented restrictions on the use of cryptocurrencies, though crypto was on the rise regardless and began to be used for peer-to-peer transactions. A few months down the line it was back in favour due to its 32 percent adoption rate by the population.

According to crypto utility website UsefulTulips, in the first half of 2021 the volumes of two major P2P platforms in Nigeria, Paxful and LocalBitcoins, were the largest in Africa, with transactions totalling over US$200 million. Nigeria is the largest market for Paxful, with around 1.5 million users and over US$1.5 billion in trading volume.

Africa has seen a massive 386.93 percent increase in P2P trading volumes on Binance since January, according to Damilola Odufuwa, Binance’s spokesperson in Africa. The user count across the continent grew 2,228.21 percent in the following four months. Elsewhere on the continent, Tanzania is also in the process of adopting cryptocurrency.