Ongoing efforts by Nigeria to limit the power of virtual currencies have begun to take fruit, as the country’s launch of a regulated digital currency, the eNaira, has attracted over half a million users in only 3 weeks after its launch. The rate of acceptance of the Central Bank of Nigeria’s digital money has been increasing in recent months. According to eNaira official spokesman, Osita Nwanisobi, upwards of 488,000 individuals have installed the consumer wallet-which is required to transact in eNaira-and approximately 78,000 vendors from over 160 nations have registered on the platform.
President Muhammadu Buhari has declared that the federal digital currency, rather than replacing Nigeria’s physical cash, is intended to complement it rather than replacing it. On October 25, 2021, Nigeria became the inaugural African nation to formally launch a central bank digital currency (CBDC), joining China and the Bahamas as the world’s first CBDCs to be used in transactions. eNaira is now the only digital money that is recognized as legal tender in Nigeria, and it will be recognized equally with real cash in the future.
CBDCs, in contrast to other digital currencies such as Bitcoin, which are stateless and uncontrolled, are supervised, centralized, and guaranteed by the central banks of their respective countries. Furthermore, in contrast to the unpredictability of digital currencies, the price of a CDBC is steady since it is supported by the country’s monetary resources. The eNaira was created by the fintech company Bitt, which also designed the digital currency control system that powers the Central Bank of the Eastern Caribbean’s CBDC.
Crypto Crackdown In Nigeria
The country’s assault on cryptocurrency trading has been continuing for some time, with numerous individuals being detained and several firms participating in such trades being shut down as evidence. Nigeria’s monetary authority issued a decision on February 5, 2021, in which it instructed all banking organizations in the nation to cease facilitating cryptocurrency transactions and transacting with companies that engage in cryptocurrency trading. It was also mentioned that cryptocurrencies are employed in unlawful transactions due to their pseudonymous character by the central bank.
While the government is attempting to reduce the notoriety of cryptocurrencies, Nigerians continue to use digital currencies as a shield against the country’s currency controls. A study by Statista discovered that people in the West African country have the world’s largest percentage of crypto assets per capita, owing to the booming demand for cryptocurrency.
According to Paxful, a peer-to-peer Bitcoin market, Nigeria has transacted 60,215 Bitcoins between 2017 and the end of 2020, the highest volume of any country outside the United States. According to a report published by Blockchain. News last year, Nigeria’s National Information Technology Development Agency (NITDA), which is tasked with championing the country’s emerging digital policy, believes that Blockchain technology has the potential to generate revenues of somewhere between $6 and $10 billion over the next 10 years for the country.