Nigeria adjusts eNaira model to boost digital currency usage: Central Bank

Nigeria adjusts eNaira model to boost digital currency usage: Central Bank

The Evolution of Nigeria’s eNaira: Encouraging Adoption of the Central Bank Digital Currency

The Central Bank of Nigeria (CBN) is making changes to the eNaira model in order to drive wider adoption of their central bank digital currency (CBDC). Nigeria, a West African country with a population of close to 224 million, introduced the eNaira in October 2021. Despite experiencing a significant increase in the number of eNaira wallets, which grew over 12-fold to 13 million between October 2022 and March 2023, the adoption rate remains relatively low. In an effort to address this challenge, the CBN is upgrading the eNaira app to enhance its user-friendly features and enable contactless payments[i].

Efforts to Promote Adoption:

To understand why eNaira adoption has not taken off as expected, it is important to consider the unique circumstances and challenges within the Nigerian economy. The country has a booming informal economy valued at $220 billion, much of which operates primarily with cash transactions. This cash-based system has limited the number of merchants who can accept eNaira payments and the level of infrastructure to support its extensive use[ii].

The Importance of Accessibility:

Accessibility is key to driving mass adoption of any digital currency. For the eNaira to become widely used, it needs to be accessible to both merchants and individuals alike. Enhancements to the eNaira app are essential in making it more user-friendly and convenient for everyday transactions. Enabling contactless payments is a significant step in the right direction. The introduction of this feature brings the eNaira closer in functionality to traditional payment methods, making it an attractive option for users[iii].

Overcoming Challenges:

In order to fully embrace digital currencies, Nigeria needs to bridge the gap between the informal cash economy and the formal digital economy. This requires a two-pronged approach. Firstly, there needs to be an increase in the number of merchants who can accept eNaira payments. This could be achieved through public awareness campaigns and incentives for businesses to adopt digital payment solutions. Secondly, the country needs to invest in the necessary digital infrastructure to support widespread eNaira use. This includes improving internet connectivity, establishing secure digital payment systems, and creating an environment that fosters trust in the new digital currency[iv].

The Path to Widespread Adoption:

Nigeria’s eNaira has the potential to revolutionize the country’s financial landscape. However, to tap into its full potential, a comprehensive strategy is needed. One example of a successful digital transformation can be found in neighboring countries like Kenya, where the mobile payment system M-Pesa is widely used. By studying such success stories, Nigeria can learn valuable lessons about the benefits of digital currencies and the steps necessary to foster their adoption[v].


The Central Bank of Nigeria’s focus on upgrading the eNaira model and making it more user-friendly is a step in the right direction towards achieving widespread adoption of the CBDC. By addressing the challenges within Nigeria’s economy and investing in the necessary infrastructure, the country can pave the way for a seamless transition from a cash-based economy to a digital one. The eNaira has the potential to improve financial inclusion, reduce transaction costs, and stimulate economic growth. With the right approach, Nigeria can unlock the immense benefits of embracing digital currencies and position itself as a leader in the blockchain industry[vi].

[i] Source: Central Bank of Nigeria (CBN) Twitter account [ii] Source: Why Nigerians Aren’t Turning to the eNaira Despite Crippling Cash Shortages [iii] Source: The Sun: Central Bank Upgrades eNaira App for More User-Friendly Experience [iv] Personal insights based on the information provided [v] Personal insights based on general knowledge and examples from other countries [vi] Personal insights based on the analysis of the current situation and potential future benefits

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