E-Naira Adoption Lags Despite Token Surge

Almost three years after its launch, the Nigerian central bank digital currency (CBDC) accounts for only 0.36% of the currency in circulation

Despite being the first central bank digital currency (CBDC) in Africa, Nigeria’s eNaira currently accounts for only about 0.36% of the total currency in circulation. This is due to several factors, including the perceived lack of significant benefits compared to the traditional naira.

Key Points:

Almost three years after its launch, the Nigerian CBDC accounts for only 0.36% of the currency in circulation, according to the Central Bank of Nigeria (CBN).

The e-naira tokens in circulation amounted to NGN 13.98 billion by the end of Q1 2024, a 1,900% increase from October 2021 figures.

Despite the slow adoption of the CBDC, Nigerians are showing enthusiasm for digital assets like bitcoin and stablecoins, making Nigeria one of the largest crypto markets.

While the CBN is attempting to generate interest in the e-naira by offering rewards and partnering with tech firms, interest in the CBDC remains low.

As a result, some have declared the CBDC project dead, with Business Day describing the e-naira as a flop in its July 29 report.

According to local experts, the CBDC has not met expectations due to its limited benefits compared to other digital payment options.

E-Naira Adoption Lags Despite Token Surge

Almost three years after its launch, the Nigerian central bank digital currency (CBDC) accounts for only 0.36% of the currency in circulation, according to data from the Central Bank of Nigeria (CBN). Nevertheless, the data indicates that the NGN 13.98 billion e-naira tokens in circulation by the end of Q1 2024 represent a remarkable 1,900% increase from the October 2021 figures.

This slow adoption of the CBDC by Nigerians contrasts with their enthusiasm for digital assets like bitcoin (BTC) and stablecoins. Despite ongoing attempts to stifle the use of cryptocurrencies and stablecoins, Nigeria remains one of the biggest and most important crypto markets globally.

Meanwhile, as previously reported by Bitcoin.com News, the CBN has attempted to generate interest in the e-naira by offering rewards to residents and merchants who accept the digital currency. Additionally, the central bank announced a partnership with tech firm Gluwa in the first quarter of 2024. The CBN expected this collaboration to enhance the functionality of the CBDC and promote financial innovation through blockchain technology.

Despite these efforts, interest remains subdued, leading some to declare the CBDC project—Africa’s first—dead. In its July 29 report, the Nigerian publication Business Day described the e-naira as a flop. The report cites local experts who agree that the CBDC has not met expectations.

Limited CBDC Knowledge

One of the experts, Ndubuisi Ekekwe, Chairman of Tekedia Capital, argues that the e-naira has not been widely adopted because it offers no real benefits.

“With digital wallets, virtual accounts, USSD, and other options available, the real contribution of eNaira to the advancement of Nigeria’s economy remains muted, from my perspective. It does not yield more money than the old Naira, nor does it help you make more money than traditional Naira,” Ekekwe stated.

Obinna Iwuno, the president of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), suggests that the Central Bank Digital Currency (CBDC) uptake has been slow because Nigeria is one of the first countries globally to launch it hence it had limited knowledge about its implementation.

On the other hand, the International Monetary Fund believes adoption is slow because the e-Naira is currently accessible only to Nigerians with bank accounts. The Bretton Woods institution highlights the challenge of making e-Naira accessible to the entire population while ensuring robust financial integrity safeguards to prevent its misuse for financial crimes.

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