Nigeria revising CBDC model to boost eNaira adoption

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Nigeria plans to alter the current model of the eNaira to boost the adoption of Africa’s first central bank digital currency (CBDC).

Folashodun Shonubi, Acting Governor of the Central Bank of Nigeria (CBN), recently confirmed the planned changes to the eNaira on Twitter. However, he didn’t provide details on the planned amendments and has also declined to respond to media requests.

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 eNaira launched in October 2021 to much fanfare. Nigeria was the second country to launch a CBDC globally after the Bahamas and the first in Africa. A month after launch, the eNaira had picked up 500,000 wallet downloads and seemed set for success.

However, the CBDC has failed to live up to expectations. It took 10 months to hit $10 million in transaction value and only 1.4 million transactions in May 2023. In comparison, Nigerians recorded 22 billion digital payments in 2022, with mobile app transfers accounting for 1.8 billion payments.

CBN continues to tweak the CBDC to boost adoption. As CoinGeek reported, the central bank upgraded the eNaira mobile app to add Near Field Communication (NFC) technology. The bank also pledged to add programmability to the CBDC, which would allow users to make the digital currency non-fungible.

While the new features will increase its allure, the eNaira’s struggles will likely continue. For many, the digital currency’s features come second, with trust being their paramount consideration. And with the CBN’s reputation hitting new lows under the stewardship of recently ousted governor Godwin Emefiele, the distrust in eNaira has shot up.

CBN’s push for CBDC adoption has also neglected a key cog in the eNaira adoption wheel—commercial bank employees. As local outlets have reported, most bankers have not received training on the CBDC’s technicalities and thus struggle to onboard new users.

To learn more about central bank digital currencies and some of the design decisions that need to be considered when creating and launching it, read nChain’s CBDC playbook.

Watch: Blockchain provides perfect foundation for CBDC