The Central Bank of Nigeria (CBN) has said the Central Bank Digital Currency (CBDC), eNaira, was finally ready for launch on Monday, October 25, 2021, by Nigerian President Muhammadu Buhari.
The launching was initially slated for October 1, Nigeria’s 61st independence anniversary. However, the launching was postponed to address some hiccups, including a lawsuit filed against the central bank by a private firm that first registered the name eNaira with the Corporate Affair Commission (CAC).
The CBN had claimed that instead of putting its entire focus on launching the eNaira on October 1, 2021, it commenced work on the design and architecture of the digital currency to mitigate risks perceived during its initial launching.
According to the apex bank, when the E-Naira is finally launched today, Nigeria would be one of the first countries to have a CBDC. While the CBDC is not meant to replace cash but to co-exist with it. The launching would make Nigeria the fifth country to launch a centralized national electronic currency, joining the likes of Cambodia, Sweden, South Korea and the Bahamas. Ahead of the United States, China, the United Kingdom, and others considering launching their own digital currency.
Bitt Inc., a Barbados-based financial technology business that uses blockchain and distributed ledger technology to enable safe peer-to-peer transactions, was selected as the technical partner for the eNaira project.
The CBN announced plans to launch the E-Naira four months after banning cryptocurrency transactions in the country after claiming the unregulated cryptocurrency space is aiding fraud and unregulated capital outflows that exposed the Nigerian public to enormous damages and risks.
The central bank, however, believed that the eNaira launching would help deepen financial inclusion in Nigeria, as it is targeted towards both the banked and unbanked segments of the population. Data from the Enhancing Financial Inclusion and Access (EFInA) shows that only 64 percent of Nigerian adults were in the financial system in 2020, way below the 80 percent target of the CBN.
While experts have noted the potential benefits of the E-Naira, they also urged the CBN to carry out more sensitization as the digital currency could be easily accessed by hackers to defraud innocent people if a strong security framework is not put in place.