Nigerian Central Bank introduces NFC technology for eNaira adoption boost.

Nigerian Central Bank introduces NFC technology for eNaira adoption boost.

The Evolving Landscape of the Blockchain Industry in Nigeria

The Central Bank of Nigeria (CBN) remains committed to the central bank digital currency (CBDC) project, despite the recent ousting of the former governor. To further encourage the adoption of the eNaira and enhance the CBDC mobile app, the central bank has incorporated Near Field Communication (NFC) technology, allowing for convenient and contactless payments. This move is expected to play a crucial role in increasing the adoption rates for the CBDC.

NFC Technology for Seamless Interaction

Previously, the eNaira mobile app utilized QR codes for transactions. However, the CBN has now added NFC technology to facilitate seamless interaction between mobile devices and payment terminals. NFC is a short-range wireless connectivity technology that uses magnetic field induction to enable communication between devices.

During an eNaira sensitization workshop at the University of Abuja, Joseph Angaye, the deputy director of the CBN’s risk management department, highlighted the importance of embracing new technology. He stated that the upgrade is an essential step in increasing the adoption rates for the CBDC.

The Multiple Benefits of the eNaira App

Angaye emphasized that the eNaira app has evolved and added numerous useful features. He mentioned, “There are many benefits of the eNaira app. The world is going digital and the CBN cannot afford to lag behind. So, when there’s new technology, we embrace it.” Nigeria was one of the first countries in the world to offer a CBDC, demonstrating its eagerness to embrace digital transformation.

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The eNaira app offers various programmable features that enhance its practicality and functionality. Authorities can program it for use within specific locations or specific items, making it useful for executing intervention programs. This programming capability also ensures that funds are allocated only for their intended purposes, preventing misuse or diversion. These features enable targeted financial assistance and enhance accountability.

The introduction of NFC technology in the eNaira app further enhances its functionality, enabling users to make convenient and contactless payments. Transactions are conducted with speed and efficiency, reducing settlement risks. The CBN’s eNaira app sets a benchmark for digital currency applications, prioritizing security and ease of use.

Overcoming Adoption Challenges

Despite Nigeria’s early adoption of the eNaira, initial usage rates fell below expectations. Former CBN Governor Godwin Emefiele attributed this slow growth to commercial banks prioritizing their profitability over CBDC expansion. However, the CBN has been proactive in addressing this issue by exploring various strategies to drive usage.

For instance, the CBN has introduced use cases in the transport sector and integrated USSD functionality into the eNaira offering, expanding its utility. These efforts aim to showcase the benefits of using the eNaira, ultimately driving greater adoption among the population.

It’s worth noting that Nigeria had previously banned banks and financial institutions from facilitating transactions in digital currencies. However, despite the ban, the country’s residents still account for the largest volume of digital token transactions conducted on peer-to-peer trading platforms outside of the United States. This highlights the enthusiasm and demand for digital currency solutions in Nigeria.

As the CBN forges ahead with the eNaira and incorporates NFC technology, it demonstrates a commitment to embracing innovative technology and empowering its citizens to live in a digital economy. The Nigerian blockchain industry continues to evolve, paving the way for a more inclusive and decentralized financial future.

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