Nigerian MNBC goes beyond the pilot to officially launch

Nigerian President Muhammadu Buhari has officially announced the launch of eNaira, the digital version of the country's currency. This announcement represents a first-of-its-kind realization for an MNBC, in a country that is a driving force for the crypto-currency market.

FACTS

• eNaira is presented as the Digital Currency of the Central Bank of Nigeria. This dematerialized version of the national currency is thus an evolution in form and an alternative to cash in circulation in the country.

• The Central Bank of Nigeria says the launch represents the culmination of several years of research and development.

• Banks, FinTechs and other local merchants have been involved in the eNaira deployment project.

• The digital currency is supported by a free mobile wallet that allows to

  • link a bank account or a payment card to fund one's account in eNaira,

  • pay without contact in stores thanks to QR Code reading,

  • manage your account and consult your transaction history,

  • make payments between individuals.

CHALLENGES

• Bringing transparency to transactions: The National Bank of Nigeria presents eNaira as a tool to make transactions more transparent and easier in the country, both between individuals and between individuals and local merchants.

• Facilitating the flow of money into the country: eNaira is not only open to Nigerians, the application can be downloaded anywhere in the world to make payments between individuals. This feature should facilitate exchanges between local residents and the Nigerian diaspora living around the world.

• Fulfilling expectations... Nigeria has established itself as a pioneer in the global crypto-currency market. More than $400 million was traded in crypto-currencies in the country in 2020 (mostly in Bitcoin); a Statista study even ranks Nigeria as the world's most crypto-currency-using nation with 42% of Nigerians saying they own or have used crypto-currencies.

• ...and regain control: The Central Bank of Nigeria is now positioning itself to avoid disruption. Nigeria has thus decided to re-establish its authority in the face of this parallel economy, classifying other crypto-currencies as illegal to better impose its eNaira.

MARKET PERSPECTIVE

• Nigeria is Africa's largest economy in terms of GDP and the most populous country on the continent with nearly 220 million people. In Africa, the country is a pioneer in the field of MNBCs. In the world, it is also a pioneer, while the vast majority of central bank digital currencies are still in the pilot stage.

• China has been the most advanced country on the topic so far with a strategy common to Nigeria's: promoting tests on its own MNBC by making it illegal to use other crypto-currencies. The Bahamas is also setting an example in the world with its partnership with MasterCard.