Many Nigerians are optimistic as Africa’s largest economy prepares to launch the continent’s first central bank-backed digital currency, eNaira. Authorities hope to tap into the popularity of the cryptocurrency so that it can better monitor digital currency transactions, prevent black market trading in the paper naira and help integrate millions of Nigerians into banking. But critics say the digital currency would give even greater control to Nigeria’s central bank.
The launch of the Central Bank of Nigeria (CBN) digital currency, or eNaira, was initially scheduled for October 1 as part of activities to mark Nigeria’s Independence Day – but was postponed by the authorities.
CBN’s director of communications, Osita Navanisobi, did not disclose the new launch date in a statement issued on the bank’s social media handle.
But local reports say the eNaira website recorded more than a million hits in the hours before its initial launch – a welcome development that blockchain experts like Janet Katyo say.
“It is going to make cross-border payments easier and it is going to make it easier for Naira to be widely used and accepted,” Katya said. “So, Nigeria is slowly reaching the point where cryptocurrency is seen as an unstoppable force.”
Kaatyo believes that eNaira will promote blockchain technologies such as cryptocurrencies, which were banned by central bank officials back in February, citing its volatility and investment risks for citizens.
CBN then promised to provide a secure alternative – eNaira. Officials and experts say eNaira will ease monetary transactions compared to its paper counterpart and improve the long-term value for Nigeria’s currency, which has hit its lowest value since 2003.
CBN also says that eNaira saves on printing and distribution costs for cash.
Digital strategist, Daniel Yerimah says that e-naira will also help in eradicating money laundering and corruption.
“Everything built on the blockchain is very safe and secure. Another thing again it is universal, part of the benefits they want to achieve with eNaira is that it will be used for both international and local trade and It will also be to fight corruption,” Yerima said.
But some experts have warned that the rise of e-naira will eliminate the role of intermediary banks and give the central bank more control over the financial rights of citizens.
However, blockchain analyst Jadel Chidi disagrees.
“There is a direct link between the central bank and the person who uses e-naira, but it will not put other banks out of business,” Chidi said. “What I see is that CBN will eventually create a portal where every e-Naira user will be able to access their e-wallet through the database already existing with their bank.”
Nigeria has seen a move towards cryptocurrencies in recent years as citizens look for alternatives to the weaker naira.
Now millions of people are waiting to see if they can benefit from Nigeria’s digital currency.