Nigeria, Africa’s largest economy, has launched e-Naira, the continent’s first digital currency. Nigeria joins a select group of countries around the world that have adopted the electronic money system, which officials hope will help raise the country’s GDP and combat inflation.
On Monday, key government officials attended the official introduction of the Central Bank of Nigeria Digital Currency, CBDC, at the state house in Abuja.
Nigeria’s president, Muhammadu Buhari, presented the e-Naira, claiming that it may enhance the country’s GDP by up to $29 billion over the next decade.
eNaira is a Central Bank of Nigeria-issued digital currency that provides a unique form of money denominated in Naira. eNaira serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments. eNaira has an exclusive operational structure that is both remarkable and nothing like other forms of central bank money.
There are several benefits from a central bank-issued digital currency in Nigeria, and this cuts across different sectors of, and concerns of the economy.
Jadel Chidi’s views
“Digital currency helps to foster faster payments, it also supposedly less expensive than the regular payment systems you have already. You make your transactions person to person; you don’t need an intermediary,” said Jadel Chidi, the blockchain expert.
“Ideally a cryptocurrency is not supposed to be centralized, but central bank digital currencies are going to be centralized because they’ll be managed by a central body, the CBN in this case and that defeats the aim of digital currency or decentralization,” said Chidi.
According to Jadel Chidi, there are also concerns about the Nigerian government’s regulation of the e-Naira.
Janet Katyo’s views
Digital money specialists such as Janet Kaatyo believe that initial issues such as Internet penetration and tech savvy may arise.
“For every technology that is new, people have to learn how to use it. It is not different with the digital currency, the e-Naira or even the cryptocurrency. People need to learn how to use these things,” said Kaatyo.
Immediately after its debut, the e-Naira app went online and was made available for users to download.
A digital money is a payment method that only exists in electronic form. Other sorts include bitcoin, which was prohibited by authorities in February because of its instability, which authorities claimed exposed citizens to significant financial dangers.
The government hopes the e-Naira to enhance Nigeria’s store of value, which is now deteriorating, as well as foster financial inclusion for millions of people.
The use of digital currencies has grown in recent years in Nigeria, especially among the younger population.
Authorities say with the e-Naira, they can better monitor transactions, curb black market trading for the paper currency, protect against devaluation, and lower inflation.