Bitcoin on naira bill

Nigeria resorts to auto rickshaws to drive eNaira adoption

One year ago, the Central Bank of Nigeria (CBN) launched the eNaira, Africa’s first central bank digital currency (CBDC), but 12 months later, adoption rates have been underwhelming.

report from Bloomberg showed that the eNaira has only been used by 0.5% of the country’s over 200 million population. It further noted that the low adoption rates stem from a lack of clarity over the difference between virtual currencies and CBDCs.

The CBN’s marketing of the eNaira has been below par, but it wants to up the ante with new policies to trigger adoption. To achieve this, the banking regulator is turning to motorized rickshaws by offering passengers and drivers discounts of 5% on each ride.

Digital asset usage has been soaring despite a nationwide ban by the CBN that precluded banks and other financial institutions from facilitating virtual currency trades. Since then, thousands of Nigerians have turned to the asset class to protect their wealth from galloping inflation and a currency that has devalued six times since 2015.

“The eNaira does not address any of these basic use cases, so no surprise at its low adoption rates so far,” said Adesoji Solanke, director at Renaissance Capital.

CBN Governor Godwin Emefiele previously heaped the blame for the country’s low CBDC adoption on commercial banks. He claimed that since the CBDC are not cash reserves in the bank’s book, there is no opportunity for the financial institutions to charge fees on their usage.

As a means to stimulate adoption, Emefiele disclosed that the central bank was in talks with a leading telecommunications provider to create USSD codes for citizens to be able to make use of the eNaira without the need for an internet connection.

eNaira initial reaction was somewhat positive

After the launch of the CBDC, initial adoption rates spiked, and according to Emefiele, the mobile app had been downloaded 840,000 times. By the second quarter of 2022, the CBN confirmed that the eNaira had processed over 200,000 transactions worth $9.5 million.

The CBN notes that the next phase for the eNaira is the acquisition of 8 million customers and the layering of a Hackathon platform to improve the functionality of the CBDC.

“The eNaira is a journey, not a one-time event,” says Emefiele. “We don’t have a choice but to live with the fact that we are now in a digital economy, in a digital space, where the users[s] of cash will dissipate almost to zero.”

Watch: The BSV Global Blockchain Convention panel, Blockchain in Africa

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