Nigeria To Upgrade CBDC For Wider Use As Crypto Restrictions Cripple Fintech Sector

Africa’s largest economy and most populous country “Nigeria,” launched the continent’s first digital currency, the e-Naira, back in October 2021.

The Central Bank of Nigeria (CBN) carries over plans to upgrade the country’s central bank digital currency (CBDC) to use in a broader range of goods and services. However, it also maintains strict crypto restrictions that cripple the country’s financial technology sector.

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Upgrade Of The CBDC

The Central Bank of Nigeria (CBN) upgraded its eNaira app based on blockchain technology to keep Nigerians away from cryptocurrency.

In an announcement, the CBN said it would include bill payments in an upgraded version of the eNaira App.

The CBN also stated: 

This is part of measures to increase the use of digital currency, including sensitization campaigns in major markets across the country.

On Monday, the CBN branch controller Bariboloka Koyor spoke at a campaign in Lagos, the most populous city in the country, to get businesses to start using the eNaira.

Bariboloka Koyor said;

Starting from next week, there is going to be an upgrade on the eNaira speed wallet app that will allow you to do transactions such as paying for DSTV or electric bills or even paying for flight tickets. 

According to Koyor, the eNiara speed wallet is faster and more convenient than internet banking, and there are no charges.

Koyor said the upgrade was launched to make it easier for people to start using the product. He touted its wallet with no charges and was faster than internet banking. The eNaira will be the only way to receive financial assistance from the government in the future.

He stressed the advantages of early adoption:

This is a project that the CBN has rolled out to reach every Nigerian in terms of financial inclusion and in terms of efficiency, reliability, and safety of banking transactions so that we can do banking transactions very easily and safely and the people in Nigeria can enjoy the benefit of the eNaira.

Restrictions On Crypto Stifling Nigeria’s Fintech Sector

The value of the naira has fallen a lot in the past six years. This has made a lot of Nigerians use crypto. A report from KuCoin said that 33.4 million Nigerians own or trade cryptocurrencies in the last six months.

Cryptocurrency has become a big deal in Nigeria’s financial sector because young people have been accepting it more and more. Cryptocurrency is seen as a way to invest money, and young people in Nigeria are looking toward digital currencies. As a result, bitcoin adoption in Nigeria has increased.

The Nigerian government is concerned that cryptocurrency adoption will hurt its financial sector, so it banned trading cryptocurrency in February 2021. It then launched its own CBDC, the eNaira, in October.

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The CBN released a statement to stop facilitating cryptocurrency-based transactions and ordered to close all accounts engaged with this type of transaction, on 5 February.

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