On Monday, October 25, 2021, Nigeria launched eNaira, Africa’s first central bank digital currency (CBDC), with the theme “Same Naira, More Possibilities.” The eNaira, which was activated the same day by President Muhammad Buhari, promises to increase remittances, encourage cross-border trade, improve financial inclusion and allow the government to make welfare payments more easily, among other benefits.

Users can access eNaira through a mobile application, which offers a digital wallet that connects to the user’s bank account. Transactions are primarily completed by sharing and scanning QR codes or a short payment code that is unique to each transfer. Users without a bank account can sign up for an eNaira wallet, but they are restricted to a maximum of 50,000 naira ($120) in daily transactions; users with bank accounts can go up to 500,000 naira ($1,200).

It has been a year since eNaira was launched and the records show that it has not been a complete success, as one of the biggest problems eNaira currently faces is its adoption among citizens.

For example, in a report by Bloomberg, a private financial, software, data and media company, it was found that less than 0.5 percent of Nigerians use digital currency]. This means that less than one in 200 people in Nigeria are active users of eNaira. This despite having a year to promote and encourage CBDC adoption.

During a ceremony held by the central bank of Nigeria to celebrate one year of eNaira, its governor, Godwin Emefiele, spoke about its use. He explained that eNaira had recorded around 700,000 transactions worth more than £8 billion.

Despite this seemingly positive statistic, Bloomberg also reported that around one million Nigerians had downloaded the eNaira digital wallet. This suggests that more than 300,000 wallets have been opened but not used.

Several Nigerians who spoke with Within Nigeria He pointed out that eNaira does not have any peculiar advantages, so it is difficult for them to adopt it.

Agbabo Temitope said he has yet to adopt eNaira because it has no advantage over other online payment services.

“It doesn’t matter, how many providers accept it? there is no special advantage in using it, it has no advantage over other online payment systems,” he said.

Babatunde Ahmed pointed out that eNaira does not increase in value and he does not see any importance in it as he can transact online.

“I can make transactions online through other platforms. The eNaira does not increase in value. It is not important, unlike cryptocurrencies,” he said.

Cryptocurrency over eNaira

The adoption of Bitcoin and other cryptocurrencies has increased in the country since February 2021 following the ban on cryptocurrencies and the introduction of eNaira in October 2021.

According to Nairametrics, Nigerian peer-to-peer Bitcoin transactions for the second quarter of 2022 totaled US$34.4 million. However, Nigeria’s second quarter total is higher than the rest of the top 5 African countries combined (South Africa US$15.2 million, Kenya US$7.8 million, Ghana US$640,000 and Tanzania, US$600,000). This is happening even as they face an effective cryptocurrency ban.

Low adoption of the digital currency of the Central Bank of Nigeria

The policy is failing because it was trying to copy other cryptocurrencies and the value of cryptocurrencies rises or falls, said Ajike Precious, an economic expert. INSIDE NIGERIA. He said that people use and hold onto cryptocurrencies for speculative reasons, “they think the value will go up and they would make more money. eNaira The value of the naira does not increase. The eNaira in your wallet is the same as the naira you have on hand.

“Other reasons are the lack of financial inclusion in Nigeria, so many people don’t have mobile phones, so many people don’t use bank accounts, the high illiteracy rate, so with these, they can’t adopt eNaira. People who do not have a phone or an account cannot use eNaira. Also, there is a lack of advertising and banks don’t want to adopt it because they make a lot of money from transaction costs.”

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