According to the Acting Governor of the Central Bank of Nigeria’s (CBN), Folashodun Adebisi Shonubi, modifications will be made to the eNaira to boost adoption.
These changes aim to enhance the number of wallet holders and boost overall activity within the system.
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
The current bank leadership appears concerted in driving up the CBDC usage, having introduced new features recently.
Among the new features:
- The eNaira has been upgraded to support NFC technology, which is the same technology used by popular platforms like Apple Pay and Google Pay for contactless payments.
- Additionally, the central bank has introduced enhanced programmability functions that allow users to set restrictions on payments, including utilization in government aid programs like farmer loans.
Launched in 2021, the eNaira has since seen the number of eWallets in circulation reach 13 million, primarily attributed to a cash shortage in the country. However, this figure represents only a fraction of Nigeria’s vast population, as it stands as Africa’s most populous country with nearly 224 million residents.
In June 2023, the International Monetary Fund (IMF) expressed disappointment over the relatively low adoption of Nigeria’s Central Bank Digital Currency (CBDC) more than a year since its launch.
According to the institution there was some initial success with wallet downloads, which reached 500,000 units within the first 25 days. However, the rate of adoption slowed significantly over time, with the number of downloads reaching 860,000 by November 2022.
According to a paper published in May 2023, merchants, in particular, have exhibited a sluggish uptake of the CBDC contributing to the overall slow adoption. Furthermore, retail customers have generally shown a lack of interest in signing up resulting in the total number of onboarded clients struggling to surpass 1% of active bank accounts.
Likewise, the volume and value of transactions involving the CBDC have been relatively constrained. While the eNaira experienced a recent surge in usage due to cash shortages, the majority of wallets (98.5%) remain inactive on a weekly basis, indicating limited regular usage, IMF said.
The global financial body recommended to integrate the eNaira with Nigeria’s fragmented mobile money system to improve the efficiency of social cash transfers. It also wants the eNaira to incorporate features like programmable payments or cash rebates into the eNaira which could potentially address the slow consumer adoption and expedite private sector investment.
According to the IMF, the eNaira holds significant potential for streamlining the remittance process.
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