Nigerians' crypto passion ends at eNaira

By: Dickson Arinze

October 26, 2022 6:20 AM

The Nigerian central bank is having trouble getting its eNaira CBDC adopted by the public, with adoption at less than 0.5%.

Crypto enthusiasts in Nigeria aren't responding positively to the country's central bank digital currency (CBDC).

A year after its introduction, the eNaira, Nigeria's government-issued digital currency, is being used by fewer than 0.5% of the country's 217 million people, according to a Bloomberg report.

However, a KuCoin report found that 35% of the Nigerian population aged 18–60 owned or traded cryptocurrencies this year, and Chainalysis ranked the country as the top in Africa for crypto adoption at number 11 globally.

According to Bloomberg, the Nigerian public has been in the dark about cryptocurrency regulations since the government began cracking down on the industry last year without providing any clear guidance.

As part of its strategy to cut off fiat inflows and outflows, the Central Bank of Nigeria banned banks from providing services to cryptocurrency exchanges in February 2021.

According to the report, the central bank now faces a new challenge: educating a population that is suspicious of the state and the elite.

In addition, the naira has been devalued roughly six times since 2015, and economists predict a further 20% loss in value next year as the economy is further compounded by galloping inflation, which may make the push for a CBDC difficult to sell to many citizens of the country.

"no surprise at its low adoption rates so far," Adesoji Solanke, director of the Lagos-based emerging and frontier markets investment bank Renaissance Capital, said of the eNaira.

The report states that due to the dismal numbers, the Nigerian central bank has decided to increase their efforts to promote the use of the currency. One such effort is to offer a discount of 5% to the drivers and passengers of motorized rickshaws that operate within the city.

Nigerian Central Bank Governor Godwin Emefiele declared in August that the eNaira project had entered its second phase, with an adoption goal of eight million users.

He also mentioned that the CBDC has been downloaded roughly 840,000 times and has approximately 270,000 functioning wallets. As of August, roughly 200,000 deals had been made, totaling 4 billion nairas (approximately $9.5 million).

Among the eleven countries with a fully deployed central bank digital currency, Nigeria is one of only two outside of the Caribbean.