Nigeria to Amend eNaira Model to Promote CBDC Use

Nigeria’s central bank wants more citizens to use its digital currency.

To that end, the bank’s acting governor, Folashodun Adebisi Shonubi, tweeted Wednesday (July 26) that the Central Bank of Nigeria (CBN) would amend its eNaira to “ensure an increase in the volume and activity of wallet holders.”

CBN Ag. Governor, #Shonubi says the CBN is amending the current model of the Central Bank Digital Currency (CBDC), the eNaira, to ensure an increase in the volume and activity of wallet holders

— Central Bank of Nigeria (@cenbank) July 26, 2023

While it’s not clear what that amendment would look like, news reports, including one from CoinDesk, have said the bank had updated the eNaira to allow for contactless payments.

Nigeria introduced its central bank digital currency (CBDC) in 2021 and saw the number of eWallets in use blossom to 13 million earlier this year amid a cash shortage in the country. That’s a fraction of Nigeria’s population, which is Africa’ largest country with nearly 224 million residents, CoinDesk reported.

Earlier this month, bank officials issued a public plea for greater eNaira adoption, according to an update published on the CBN website.

That report quoted Mercy Itohan Ogbomon-Paul, controller at CBN Akwa Ibom, who argued Nigeria lags behind other countries in ePayments.

“The eNaira is expected to help us to be at par with what other countries are doing,” she said. “The unfolding trend now is that we use ePayment rather than physical cash. It is the semblance of the Naira that we could use in transactions rather than physical cash because the Naira, as we know, is very difficult and costly to replace.”

The news follows a survey released earlier this month by the Bank of International Settlements (BIS) showing the increasing popularity of CDBDs. Ninety-three percent of central banks were involved in some sort of CBDC as uncertainty about short-term CBDC issuance declines.

However, the BIS said wholesale CBDCs could let financial institutions access “new functionalities enabled by tokenization, such as composability and programmability.”

Meanwhile, PYMNTS spoke last week with Daniel Field, global head of blockchain at UST, who said CBDCs could “change the nature” of finance, despite skepticism about the coins.

“It’s legitimate that people ask questions, and it’s legitimate that our governments answer those questions,” Field said.

But he stressed that “[these questions are] not a blockchain thing, they’re not a crypto thing. This relates to any technology, any government policy which needs to be scrutinized and understood what its impact on all the stakeholders is.”

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