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.

(By ARIJIT SARKAR)