Despite Nigeria’s status as one of Africa’s leading economies and its high crypto adoption rate, the nation’s digital currency known as the eNaira faces challenges gaining traction among citizens, according to legal expert Chinedu Albert.
Crypto Ban Hindered eNaira Launch
Albert notes that the Central Bank of Nigeria’s (CBN) ban on crypto transactions, which went into effect in February 2021, hindered the adoption of the eNaira when it was launched in October 2021. Data from Chainalysis revealed Nigeria to be the sixth highest globally for crypto adoption at the time. However, the CBN ban worked against creating trust in the eNaira.
Difficulty Paying with eNaira
Despite Nigeria lifting its crypto ban in December 2023, enthusiasm for the eNaira remains low. Digital finance expert Tobi Aremotobi has called it “an exercise in futility“, noting that most merchants do not accept the eNaira and many citizens remain skeptical of its utility. The IMF reports that weekly average eNaira transactions amount to only 1.5% of monthly wallet transactions, indicating that over 98% of eNaira wallets go unused each week.
Plans to Integrate with Mobile Wallets
The eNaira plans to integrate with popular Nigerian mobile money frameworks run by companies like Kuda, oPay and Flutterwave, or create its own retail access network. The CBN has partnered with Flutterwave to promote eNaira adoption among merchants and banks. However, the IMF views these strategic partnerships as potential risk factors that may not match Nigeria’s preference for cash and mobile money services.
Hope for the Future
While the eNaira launch has been stalled, experts say there is hope if the CBN can build credibility for the Naira and trust in its central authority. With adequate policies and execution, the eNaira could realize its potential to digitize Nigeria’s economy.
The journey has only just begun.