Skip to main content

Nigeria CBDC adoption spikes as fiat currency shortage grip the nation

The acute cash shortage in Nigeria was due to the central bank’s decision to replace older bank notes with bigger denominations amid rising inflation.

Nearly 18 months after launching its in-house central bank digital currency (CBDC), eNaira, Nigeria witnessed its massive adoption as national fiat reverses face severe shortages. 

The acute Cash shortage in Nigeria was due to the central bank’s decision to replace older bank notes with bigger denominations amid rising inflation. While developing nations were among the first to acknowledge the importance of a CBDC in revamping fiat capabilities, the idea is yet to materialize.

However, in the case of Nigeria, the lack of physical cash forced citizens to opt for the eNaira. In a country where cash accounts for about 90% of transactions, the value of eNaira transactions increased 63% to $47.7 million (22 billion naira), revealed a Bloomberg report.

Moreover, according to Godwin Emefiele, governor of the Central Bank of Nigeria, the total number of CBDC wallets grew more than 12 times when compared to October 2022 — currently at 13 million wallets.

Magazine: Unstablecoins: Depegging, bank runs and other risks loom

The demonetization reduced the circulating Cash supply from 3.2 trillion nairas to 1 trillion nairas. Compensating for this decline, Nigeria minted over 10 billion nairas in CBDC. In addition, eNaira payouts in government initiatives and social schemes also contribute to the increase in CBDC’s adoption.

For developing countries, CBDCs present a way to overcome challenges presented by the fiat economy, which includes reducing operating costs and strengthening anti-money laundering (AML) initiatives.

“The eNaira has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions,” concluded Emefiele.

Related: eNaira is ‘crippled‘: Nigeria in talks with NY-based company for revamp

Amid the cash crunch, Nigerians have been presented with another option for procuring cryptocurrencies. MetaMask’s parent firm ConsenSys recently announced a new MoonPay integration, which allows Nigerians to purchase crypto via bank transfers.

Screenshot showing option to buy crypto using fiat. Source: ConsenSys

As shown in the above screenshot, the new feature is available within the MetaMask mobile and Portfolio DApp, significantly simplifying the process of buying crypto without using credit or debit cards in Nigeria.

Comments

Post a Comment

Popular posts from this blog

BNP Paribas teams up with Bank of China to promote digital yuan usage

The partnership will enable BNP Paribas China's corporate clients to make payments using the digital yuan through an e-CNY management system. The French bank BNP Paribas is collaborating with the Bank of China (BOC) to promote China's digital currency, the digital yuan, to its corporate clients, the South China Morning Post reported.  The partnership will enable BNP Paribas China's corporate clients to connect with the BOC system, allowing users to manage their digital yuan wallets by linking them to their bank accounts, track transactions, and make payments using China's digital currency via an e-CNY management system. The e-CNY management system also promises to make it easier and more convenient for clients to use digital cash for real-time transactions. The e-CNY management system can facilitate “efficient, real-time and convenient [digital cash] practice,” BNP shared, according to The South China Morning Post.  BNP Paribas China also plans to explore the use...
Read more

VeChain Working With United Nations in Sustainability Campaign

Image
VeChain is launching a new sustainability campaign with the United Nations aiming towards the promotion of sustainability through the AWorld campaign. “We’ve just launched our Challenge Tournament in the AWorld app, the official platform in support of the United Nations ACTNOW sustainability campaign! We have some epic prizes for our eco-champions – are you ready to play?” the project tweeted. Source: Zipmex AWorld is the UN’s official platform supporting the ACTNOW campaign. The VeChain sustainability campaign pushing for individual actions on climate change and sustainability. Its partners include the University of Cambridge, the European Commission, BlackRock, Prada, and now, VeChain Also Read: VeChain : VET Secures Key US Patent For Blockchain Transactions The VeChain Blockchain network will reward participants for daily sustainability actions as part of the initiative. According to VeChain , all participants will receive an exclusive NFT, with one lucky winner rece...
Read more

5 New Countries To Join BRICS Alliance in August

Image
The next BRICS summit will be held in South Africa in August and the bloc of five nations will decide on expanding the alliance. It is reported that the BRICS expansion could occur in August making the alliance rebrand itself as BRICS+. Among the 25 countries that have applied to join the BRICS alliance, five could be allowed entry into the bloc. Their entry into the group is almost certain and the announcement of the expansion could be made at the summit. Also Read: BRICS: Saudi Arabia, Iran & Brazil Pay in Chinese Yuan, Ditch U.S. Dollar BRICS is an acronym for Brazil, Russia, India, China, and South Africa. The group is looking to take on the U.S. dollar by launching a new currency for global trade. BRICS: 5 New Countries To Join the Alliance in August Source: pakistantoday.com.pk Out of the 25 countries that formally sent their applications to join BRICS, only five could be inducted in August. The five countries likely to join the BRICS alliance are Saudi Arabia, the United Ara...
Read more