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More Nigerians Resort to e-Naira 18 Months After Launch, Here’s Why

2 mins
Updated by Kyle Baird
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In Brief

  • Nigerians have turned to digital currency payments amid banknote storage.
  • Since its launch in October 2021, about 13 million users have been created e-wallets.
  • Per the apex bank governor, physical currency in circulation went down to about 1 trillion naira.
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Nigerians are increasingly using digital currency for transactions due to banknote storage, driving e-Naira’s adoption months after its debut.

According to recent reports, eNaira transactions increased by 63% in 2023 to 22 billion naira (~$47.7 million).

e-Naira Gets a Push After 18 Months

The e-Naira launched in October 2021 after the website for Nigeria’s central bank’s digital currency went live in September. Since then, approximately 13 million users have signed up for e-wallets, according to the report. Godwin Emefiele, governor of the Central Bank of Nigeria (CBN), said it is a more than 12-fold rise since its October launch. 

The official stated,

“We have seen good progress in the adoption of the eNaira. We are happy that as we try to move more and more towards financial inclusion, and get people away from being excluded in the financial system, the naira remains one of the very portable options for all to adopt.”

After a sluggish start, e-Naira usage appears to finally be gaining steam in the country. Data indicated that adoption levels remained modest in the fourth quarter of 2022. However, Nigerians have been subject to a cash withdrawal cap since January. The government’s demonetization operation to replace currency notes last year has reportedly left ATMs dry. Additionally, restrictions on over-the-counter cash withdrawals have also pushed people online.

The governor claims that after efforts to reduce access liquidity, the amount of physical money in circulation decreased to about 1 trillion naira from 3.2 trillion naira in September.

According to Emefiele, about 3.4 billion of the more than 10 billion minted digital e-naira is in circulation. 

He also credited the government for using eNaira for welfare programs. He explained that the increased adoption of the currency is due to the opening of 4 million new e-wallets by scheme beneficiaries. 

“The eNaira has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions,” the governor said.

CBDCs Part of a Global Conversation

The Central Bank of the United Arab Emirates (CBUAE) is closer to launching a digital dirham as it recently introduced the central bank digital currency (CBDC) strategy.

Gulf Times confirmed in its report that CBUAE had signed an agreement with G42 Cloud and R3 to provide the necessary technology and infrastructure to implement a CBDC strategy. The strategy comes under CBUAE’s Financial Infrastructure Transformation (FIT) Programme. 

In contrast, Florida Governor Ron DeSantis wishes to outlaw CBDCs in the US. 

According to the press release from Monday, DeSantis proposed outlawing the use of both Fed-issued and foreign CBDC as currency. He has urged other states to follow suit by including similar prohibitions in their uniform commercial codes.

“The Biden administration’s efforts to inject a centralized bank digital currency is about surveillance and control,” DeSantis stated.

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Shraddha Sharma
Shraddha is an India-based journalist who worked in business and financial news before diving into the crypto space. As an investment enthusiast, she has also has a keen interest in understanding crypto from a personal finance standpoint.
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