Nigeria’s central bank digital currency (CBDC) is not being well received by the country’s knowledgeable crypto community.
Only 0.5% Use the eNaira
A year after its introduction, the government-issued digital currency, the eNaira, is only being used by less than 0.5% of Nigeria’s 217 million people, according to a Bloomberg article.
This is true even though a KuCoin research indicated that 35% of Nigerians between the ages of 18 and 60 had owned or traded cryptocurrencies this year, and despite Nigeria being ranked 11th globally and first in Africa by Chainalysis for crypto adoption.
According to Bloomberg, Nigerians have been perplexed as a result of the state’s lack of clarification following its crackdown on cryptocurrencies last year. The Central Bank of Nigeria forbade banks from providing services to cryptocurrency exchanges in February 2021 in an effort to cut off the fiat on and off ramps.
According to the report, the central bank is having trouble educating individuals who are generally suspicious of the government and the ruling class. Additionally, the naira has lost value almost six times since 2015, and economists predict a further 20% loss in value next year as the economy is further hampered by soaring inflation. As a result, many Nigerians may find it difficult to support the creation of a CBDC.
“The eNaira does not solve any of these core use cases, thus no surprise at its low adoption rates so far,” claims Adesoji Solanke, director of emerging and frontier markets investment firm Renaissance Capital in Lagos.
Efforts to promote the CBDC
The report claims that in response to the poor results, the Nigerian central bank is stepping up efforts to boost the acceptance of the currency, including by providing a 5% discount to the operators and passengers of the motorized rickshaws that traverse the city’s streets.
The second phase of the eNaira project, with an eight million user adoption goal, began in August, according to an announcement made by Godwin Emefiele, governor of the Nigerian Central Bank.
At that time, he also mentioned that there had been roughly 840,000 downloads of the CBDC, with about 270,000 active wallets. There had been about 200,000 transactions by the end of August, totaling 4 billion Naira, or about $9.5 million at the time.
Nigeria is one of eleven nations that have fully implemented a central bank digital currency; the other ten are in the Caribbean, according to the Atlantic Council’s CBDC tracker.
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