President Muhammadu Buhari is set to formally unveil the Nigerian Central Bank Digital Currency (CBDC), known as the eNaira, on Monday 25 October 2021, at the State House, Abuja.
Central bank-backed CBDCs and cryptocurrency are both virtual money, however, CBDCs are issued and regulated by the central bank while cryptocurrencies are out of government control.
The launch of the eNaira is a combination of several years of research work by the Central Bank of Nigeria in advancing the boundaries of the payments system in order to make financial transactions easier and seamless for every part of society.
“Following a series of engagements with relevant stakeholders including the banking community, fintech operators, merchants and indeed, a cross-section of Nigerians, the CBN designed the digital currency, which shall be activated on Monday, October 25, 2021.” the Central Bank of Nigeria in their press release.
The eNaira marks a major step forward in the evolution of money and the Central Bank of Nigeria said it is committed to ensuring that the eNaira, like the physical Naira, is accessible by everyone.
The Central Bank of Nigeria also noted that the launch of the eNaira is only the first step of the journey which will continue with a series of modifications, capabilities and enhancements to the platforms. The CBN will continue to work with relevant partners to ensure a seamless process that will benefit every user, particularly those in the rural areas and the unbanked population.
The digital currency is expected to benefit Nigeria’s economy in many ways, from cross-border trade to making remittance inflows more efficient.
China became the first major economy to pilot a central bank digital currency last year. Since then, five countries have launched digitised currencies, according to a Central Bank Digital Currencies tracker by American think-tank Atlantic Council. Other African countries exploring CBDCs include Kenya, South Africa, and Rwanda.
In West Africa, Ghana is also working on producing its own digital currency after the Bank of Ghana partnered with German firm Giesecke+Devrient (G+D) to pilot the e-Cedi. G+D will provide the technology that will be tested in a trial phase with local banks, payment service providers, consumers and others.
Nigeria has seen a boom in the use of cryptocurrencies as people look for ways to avoid the weakening naira currency.