Nigeria’s central bank digital currency, known as the eNaira, was the first of its kind in Africa. However, it currently represents only about 0.36% of the total currency in circulation. Nigerian experts attribute the slow adoption of the e-naira to its perceived lack of significant benefits compared to the traditional naira.

E-Naira Adoption Lags Despite Token Surge

Almost three years after its launch, the Nigerian central bank digital currency (CBDC) accounts for only 0.36% of the currency in circulation, according to data from the Central Bank of Nigeria (CBN). Nevertheless, the data indicates that the NGN 13.98 billion e-naira tokens in circulation by the end of Q1 2024 represent a remarkable 1,900% increase from the October 2021 figures.

The slow adoption of the CBDC by Nigerians contrasts with their enthusiasm for digital assets like bitcoin (BTC) and stablecoins. Despite ongoing attempts to stifle the use of cryptocurrencies and stablecoins, Nigeria remains one of the biggest and most important crypto markets globally.

Meanwhile, as previously reported by Bitcoin.com News, the CBN has attempted to generate interest in the e-naira by offering rewards to residents and merchants who accept the digital currency. Additionally, the central bank announced a partnership with tech firm Gluwa in the first quarter of 2024. The CBN expected this collaboration to enhance the functionality of the CBDC and promote financial innovation through blockchain technology.

Despite these efforts, interest remains subdued, leading some to declare the CBDC project—Africa’s first—dead. In its July 29 report, the Nigerian publication Business Day described the e-naira as a flop. The report cites local experts who agree that the CBDC has not met expectations.

Limited CBDC Knowledge

One of the experts, Ndubuisi Ekekwe, Chairman of Tekedia Capital, argues that the e-naira has not been widely adopted because it offers no real benefits. Ekekwe states:

With digital wallets, virtual accounts, USSD, and other options available, the real contribution of eNaira to the advancement of Nigeria’s economy remains muted, from my perspective. It does not yield more money than the old Naira, nor does it help you make more money than traditional Naira.

Obinna Iwuno, the president of the Stakeholders in Blockchain Technology Association of Nigeria (SIBAN), suggests that the Central Bank Digital Currency (CBDC) uptake has been slow because Nigeria is one of the first countries globally to launch it hence it had limited knowledge about its implementation.

The International Monetary Fund on the other hand believes adoption is slow because the eNaira is currently accessible only to Nigerians with bank accounts. The Bretton Woods institution emphasizes the challenge of making eNaira accessible to the entire population while ensuring robust financial integrity safeguards to prevent its misuse for financial crimes.