Nigerians’ passion for crypto stops at eNaira

by · October 25, 2022

Nigeria’s central bank digital currency (CBDC) is not getting the warm reception expected by its crypto-savvy population.

According to a Bloomberg report, less than 0.5% of Nigeria’s 217 million people use the state digital currency – the eNaira – a year after its launch.

This comes despite Nigeria being identified by Chainalysis as the top country in Africa for crypto adoption and ranked 11th globally, while a KuCoin report found that 35% of the Nigerian population aged 18 to 60 had owned or traded cryptocurrencies this year.

Bloomberg noted that Nigerians have been left confused due to a lack of clarity from the state that cracked down on crypto last year.

In February 2021, the Central Bank of Nigeria banned banks from operating crypto exchanges in an effort to break fiat on and off ramps.

Educating people who are generally wary of the state and ruling elite has also become a challenge for the central bank, according to the report.

Furthermore, the naira has been devalued around six times since 2015, and economists expect a further 20% loss next year as the economy has been further strained by galloping inflation, which could make the push for a CBDC a tough sell for many of the country’s citizens .

According to the director at Lagos-based emerging and frontier investment bank Renaissance Capital, Adesoji Solanke, “eNaira does not address any of these fundamental use cases, so there is no surprise at the low adoption rate so far.”

The disappointing numbers are now prompting Nigeria’s central bank to step up efforts to boost usage, including offering a 5% discount to drivers and passengers of motorized rickshaws plying the city’s streets, according to the report.

Related: Nigeria becomes most crypto-obsessed nation after April crash

In August, Nigerian central bank governor Godwin Emefiele announced that the eNaira project entered its second phase in August with an adoption target of eight million users.

At the time, he added, CBDC has had around 840,000 downloads, with around 270,000 active wallets. By August, there had been about 200,000 transactions worth 4 billion naira – about $9.5 million at the time.

According to the Atlantic Council’s CBDC tracker, Nigeria is one of eleven countries to have fully deployed a digital central bank currency, the other ten being in the Caribbean.