Nigeria Launches The eNaira

Nigeria has launched its Central Bank Digital Currency(CBDC) at State House in Abuja, a function that has been officiated by President Muhammadu Buhari. The unveiling of the eNaira is a culmination of several years of research by the Central Bank of Nigeria in advancing the boundaries of the payment system, making transactions easier and seamless.

It is the culmination of a series of engagements with relevant stakeholders including the banking community, fintech operators, merchants as well as a cross-section of Nigerians.

CBN has said it will ensure the digital cash is available to all, particularly the unbanked as well as those living in the rural areas.

“A handful of countries including China, Bahamas, and Cambodia have already issued their own Central Bank Digital Currencies (CBDCs). A 2021 survey of Central Banks around the world by the Bank for International Settlements (BIS) found that almost 90 per cent are actively researching the potential for CBDCs, 60 per cent were experimenting with the technology and 14 per cent were deploying pilot projects,” said President Buhari.

In response to these developments, an overwhelming majority of Central Banks across the world have started to consider issuing digital currencies in order to cater for businesses and households seeking faster, safer, easier and cheaper means of payments.

Godwin Emefiele, Governor of the CBN said during the launch of the CBDC that the eNaira is the digital equivalent of the physical naira, the country’s currency. “As the tagline simply encapsulates, the eNaira is the same Naira with far more possibilities. The eNaira – like the physical Naira – is a legal tender in Nigeria and a liability of the CBN. The eNaira and Naira will have the same value and will always be exchanged at 1 naira to 1 eNaira,” he said.

This move was underpinned by the fact that the CBN has been a leading innovator in the form of money they produce, and in the payment services, they deploy for efficient transactions. They have invested heavily in creating a Payment System that is ranked in the top ten in the world and certainly the best in Africa. This payment system now provides high‐value and time‐critical payment services to financial institutions, and ultimately serves as the backbone for every electronic payment in Nigeria.

“The Nigerian Central Bank Digital Currency is among the first in the world and thus authorities have put measures in place to deal with any issues that might arise from the pilot implementation of the eNaira, whose theme is Same Naira, More Possibilities,” said Osita Nwanisobi, Director of Corporate Communication, Central Bank of Nigeria.

The journey to create a digital currency for Nigeria began sometime in 2017, gaining momentum over the past several months with several brainstorming exercises, deployment of technical partners and advisers, collaboration with the Ministries of Communication and Digital Economy and its sister agencies like the Nigerian Communications Commission, integration of banking software across the country and painstaking tests to ensure the robustness, safety and scalability of the CBDC System.