CBN Expands eNaira Adoption to Boost Digital Currency Usage
The Central Bank of Nigeria (CBN) is intensifying efforts to expand the use of its digital currency, the eNaira, as part of a broader strategy to position the country as a global leader in central bank digital currency (CBDC) adoption.
According to the CBN’s 2024-2025 Monetary, Credit, Foreign Trade, and Exchange Policy Guidelines released on Monday, the expansion will facilitate payments into government accounts and enable ministries, departments, and agencies (MDAs) to initiate payments to vendors and beneficiaries via eNaira.
The guidelines stated, “The CBN shall continue to work towards enabling the use of eNaira wallets/channels by payers to pay into government accounts at the CBN and allow ministries, departments and agencies to initiate vendor/beneficiary payments from their respective eNaira wallets.”
This move comes as Nigeria is recognized among the top three countries globally for significant traction in CBDC adoption, alongside the Bahamas and Jamaica, according to a report by the U.S.-based Atlantic Council. The report highlighted that as of September 2024, these three nations are the only ones to have fully launched their CBDCs.
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“In Nigeria and the Bahamas, CBDC issuance has increased substantially,” the report noted, further affirming Nigeria’s leadership in the CBDC space. Nigeria’s eNaira, launched in October 2021, made it the first African nation and the second globally to roll out a digital currency after the Bahamas’ “Sand Dollar.”
Despite challenges, including cash shortages and disputes over cryptocurrency operations in Nigeria, the CBN has partnered with banks, fintech companies, and merchants to promote the adoption of the eNaira.
The central bank’s push comes as global interest in CBDCs accelerates, with 134 countries representing 98% of the world’s GDP exploring digital currencies. The Atlantic Council report added that 66 countries are in advanced stages of development, with 44 ongoing CBDC pilots worldwide.
According to the CBN’s quarterly statistical bulletin for the first quarter of 2024, Nigeria had N3.87 trillion in currency circulation as of March, with the eNaira accounting for N13.98 billion, representing approximately 0.36% of the total currency in circulation.
While the eNaira has maintained 24/7 availability since its launch, adoption remains slow. A report by the International Monetary Fund marking the first year of the eNaira’s introduction noted that only 1.5% of eNaira wallets were engaged in weekly transactions.
As the CBN continues its efforts to bolster digital currency adoption, the focus remains on addressing these challenges and promoting the eNaira’s integration into everyday transactions.
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