Connect with us

Africa

Nigeria CBDC Adoption Rises as Fiat Currency Shortage Grips Country

Overall, the introduction of eNaira in Nigeria is a significant step towards modernizing the country’s financial system and promoting financial inclusion. With the rise of CBDCs, other developing countries may follow Nigeria’s lead and adopt their own digital currencies to address the challenges. According to Emefiele, eNaira has become the preferred electronic payment channel for financial inclusion.

Published

on

Nigeria is suffering from a serious shortage of physical cash as the country’s central bank has replaced older banknotes with larger denominations due to rising inflation. As a result, the adoption of the country’s central bank digital currency (CBDC), eNaira, has skyrocketed.

While developing countries were among the first to recognize the importance of a CBDC in overhauling fiat capabilities, Nigeria is one of the few countries where the idea has been realized due to a lack of physical cash. In a country where cash accounts for about 90% of transactions, the value of eNaira transactions increased 63% to $47.7 million (22 billion eNaira), according to a Bloomberg report.

Godwin Emefiele, the governor of the Central Bank of Nigeria, said the total number of CBDC wallets increased more than 12-fold from October 2022 and currently stands at 13 million wallets. Demonetization reduced circulating cash from 3.2 trillion eNaira to 1 trillion eNaira, but Nigeria minted over 10 billion eNaira in CBDC to offset this decline. In addition, eNaira disbursements in government initiatives and social programs are also contributing to the increase in CBDC adoption.

For developing countries, CBDCs are a way to address the challenges of the fiat economy, including reducing operating costs and strengthening anti-money laundering (AML) initiatives. According to Emefiele, Nigeria’s eNaira has become the preferred electronic payment channel for financial inclusion and social intervention delivery.

Read more about the adoption of eNaira in Nigeria and find the most important economic news from around the world with the Born2Invest mobile app.

Amid the money crisis, Nigerians were also presented with another option for acquiring cryptocurrencies

ConsenSys, the parent company of MetaMask, recently announced a new MoonPay integration that allows Nigerians to purchase crypto via bank transfer. This new feature is available in MetaMask Mobile and Portfolio DApp and greatly simplifies the process of buying crypto without using credit or debit cards in Nigeria.

Overall, the introduction of eNaira in Nigeria is a significant step towards modernizing the country’s financial system and promoting financial inclusion. With the rise of CBDCs, other developing countries may follow Nigeria’s lead and adopt their own digital currencies to address the challenges facing their fiat economies.

__

(Featured image by Jeff Attaway CC BY 2.0 via Flickr)

DISCLAIMER: This article was written by a third party contributor and does not reflect the opinion of Born2Invest, its management, staff or its associates. Please review our disclaimer for more information.

This article may include forward-looking statements. These forward-looking statements generally are identified by the words “believe,” “project,” “estimate,” “become,” “plan,” “will,” and similar expressions. These forward-looking statements involve known and unknown risks as well as uncertainties, including those discussed in the following cautionary statements and elsewhere in this article and on this site. Although the Company may believe that its expectations are based on reasonable assumptions, the actual results that the Company may achieve may differ materially from any forward-looking statements, which reflect the opinions of the management of the Company only as of the date hereof. Additionally, please make sure to read these important disclosures.

First published in COIN KURIER, a third-party contributor translated and adapted the article from the original. In case of discrepancy, the original will prevail.

Although we made reasonable efforts to provide accurate translations, some parts may be incorrect. Born2Invest assumes no responsibility for errors, omissions or ambiguities in the translations provided on this website. Any person or entity relying on translated content does so at their own risk. Born2Invest is not responsible for losses caused by such reliance on the accuracy or reliability of translated information. If you wish to report an error or inaccuracy in the translation, we encourage you to contact us.

Suzanne Mitchell juggles the busy life of a full-time mom and entrepreneur while also being a writer-at-large for several business publications. Her work mostly covers the financial sector, including traditional and alternative investing. She shares reports and analyses on the real estate, fintech and cryptocurrency markets. She also likes to write about the health and biotech industry, in particular its intersection with clean water and cannabis. It is one of her goals to always share things of interest to women who want to make their mark in the world.