Nigeria Launches The First Digital Currency In Africa – eNaira

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Nigeria Digital Currency - eNaira

Nigeria on Monday becomes the first African nation to launch a digital currency – eNaira a move which the Central Bank of Nigeria says is a “major step forward in the evolution of money” and will expand access to banking, enable more remittances and even grow the economy by billions of dollars.

Unveiling the eNaira at the launch, President Muhammadu Buhari of Nigeria said the use of the currency could grow the economy by $29 billion over ten years, enabling direct government welfare payments and even increase the tax base.

Central Bank Governor Godwin Emefiele said during Monday’s launch that there had been “overwhelming interest and encouraging response”, adding that 33 banks, 2,000 customers and 120 merchants had already registered successfully with the platform, which is available via an app on Apple and Android.

President Buhari launches the eNaira

The eNaira is a legal tender and the equivalent of the Nigeria’s paper Naira currency regulated by the Central Bank of Nigeria. Some 200 million nairas’ worth of eNaira, which will maintain parity with the traditional currency, has been issued to financial institutions, he said.

Cryptocurrency use has grown rapidly despite a Central Bank ban in February on banks and financial institutions dealing in or facilitating transactions in them. Nigeria started a crackdown on Cryptocurrencies February 2021 banning payments from cryptocurrency exchanges.

Digital currencies remains very popular in Africa’s most populous nation due to Nigeria’s young, tech-savvy population despite the ban. Nigeria ranked seventh in the 2021 Global Crypto Adoption Index compiled by research firm Chainalysis.

According to financial reports just under half of the adult population have bank accounts and this might be the move needed to get the population under this digital revolution. But experts and cryptocurrency users in the continent’s biggest economy say the fact that there are more questions than answers regarding the eNaira – and a large amount of worry over the consistency of Central Bank (CBN) rules – means the government faces a tough path to make the eNaira a success.

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