Following the launch of Nigeria’s CBDC website in September, the eNaira, designed to complement the nation’s physical currency, has officially launched.
Despite Nigeria’s tricky relationship with cryptocurrency, which culminated in the Central Bank of Nigeria (CBN) placing a ban on virtual currency transactions within the banking sector in February, that hasn’t stopped the continuing growth of the industry.
While the move by CBN was intended to regulate Nigeria’s rapidly growing crypto ecosystem, many industry insiders believe it was reckless and motivated by fear of the unknown.
The CNB intended to launch the CBDC on October 25 after initially failing on October 1, but insisted the delay was down to wanting to release a reliable project that has long-term sustainability.
The two applications required for using the CBDC, the eNaira speed wallet and eNaira merchant wallet, are both available for download on the Google and Apple app stores.
The eNaira was developed by fintech company Britt, who is also responsible for the Eastern Caribbean Central Bank CBDC.
Nigeria became the first country in Africa to launch a CBDC and according to its official website, the eNaira will “cultivate of economic growth, provide cheaper remittances, limit fraudulent behaviour, and is secure, among other benefits for its use”.
Why was crypto banned?
Part of the justification for the banning of cryptocurrency in February, according to insider sources from CBN was that the bank attempted to get remittance dollars to flow back into the official channels to support the exchange rate.
Other excuses by the CBN also include the fact that, unlike traditional currencies, crypto is not subject to monetary policy, while further criticising it is high volatility and opaqueness.
Notably, the Apex bank pointed at an instance where at least three million Nigerians lost about 18bn Naira (or $47m) to a Ponzi scheme that was facilitated by cryptocurrency.
Well, the CBN didn’t have it all easy on their own path either as there was a serious backlash from all angles, especially from the fintech sector who fears that the CBN move may paint the country as hostile and further affect the growth rate of foreign direct investment (FDI).
Additional research by Oyinloye Bosun.
Disclaimer: The views and opinions expressed by the author should not be considered as financial advice. We do not give advice on financial products.