Nigeria’s Central Bank launched a digital currency on Monday that is designed to be used alongside its physical currency. The release of eNaira was officially announced via a press release issued by the Central Bank of Nigeria.
A central bank digital currency is a type of cryptocurrency that’s controlled by a country’s central bank. More than 100 countries, including the US and China, are exploring the development of a CBDC, according to the IMF. The virtual money, dubbed the eNaira, is backed and issued by the country’s apex bank, the Central Bank of Nigeria (CBN). Like most governments, Nigeria is introducing a virtual currency because it is more cost-efficient than physical cash, helps the unbanked have easier access to money, and can, in some way, limit illicit activities.
According to several media reports CBN picked Barbados-based Bitt Inc in August to develop and roll out the digital currency. The company has a track record: It assisted the Eastern Caribbean Currency Union (ECCU) to design and launch DCash, the digital currency used by Antigua and Barbuda, Grenada, Saint Kitts, and Nevis, and Saint Lucia — four of the five countries that have fully launched their own CBDCs.
On September 27, the CBN launched the eNaira website, detailing necessary information on how Nigerians can access and use the virtual currency.
First, Nigerians will have to download the eNaira mobile application on the Apple Store or Play Store. They can also opt to scan a QR code on the website to access the service.
After registration, users must register and create a wallet — called the Speed Wallet — to store, send and receive money. Several tiers of wallets are available on the platform catering to various users with or without bank accounts and different identification levels.
The website lists four main eNaira features: a unified payment system that allows customers to move money from their eNaira wallet; a bank account management feature that lets users check balances and transaction history; a contactless payment service so users can make in-store payments by scanning QR codes; and P2P payments, in which users send money to each other via a linked bank account or card. This is a positive development by Nigeria and at the same time there’s fear surrounding how they could be used by governments with a track record of surveilling or attempting to surveil their citizens. This will be the next challenge for Nigeria.