Nigeria : Government Launches Digital Currency

The eNaira expected to boost the economy will be backed by the country’s Central Bank.

Nigeria has become the latest country to launch a digital currency backed by its central bank with the aim of improving its payments system. Since yesterday, October 25, 2021 residents of Africa’s most populated country are able to make payments using the eNaira, a digital compliment to the country’s physical currency. The eNaira will be backed by the Central Bank of Nigeria and “marks a major step forward in the evolution of money,” government said in a communique that also named Barbados-based Bitt Inc as a technical partner in the development of the digital innovation. To the Governor of Central Bank of Nigeria (CBN), Godwin Emefiele, “the eNaira would operate as a wallet against which customers can hold existing funds in their bank account.”
Reuters has quoted the Nigerian government as saying the launch of eNaira which has been hailed as a major financial stride comes after, “a culmination of several years of research work by the Central Bank of Nigeria in advancing the boundaries of payments system in order to make financial transactions easier and seamless for every strata of the society.” The move comes as countries worldwide mull the introduction of digital currencies backed by central banks (CBDCs) which capitalize on the popularity of crypto by offering cheap and ultra-fast payments infrastructure. 
The progress of the eNaira will likely be watched with interest by central banks in both the UK and the European Union. Both the Bank of England and European Central Bank have announced research into issuing a digital currency with the EU claiming that an e-euro could be operational by 2025. In April the Bank of England and HM Treasury announced the creation of a join Taskforce to coordinate research into a UK CBDC which is ongoing. The People’s Bank of China is a front runner in the field and has already issued a digital version of the yuan. Since the launch of the e-yuan Beijing has accelerated its crackdowns on crypto payments. 
 

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