Nigeria CBDC Adoption Soars Amid Cash Shortage

Nigeria CBDC adoption has been soaring over the past months due to millions of residents turning away from using the country's fiat currency in favour of the eNaira, multiple news outlets have reported.

The Central Bank of Nigeria has printed larger denominations of its currency to replace older banknotes as it fights rising inflation.

While this has been one of the many ways several developing economies, including West African counterparts like Ghana, have tried to reduce inflation and tackle rising economic challenges, most Nigerians feel that the current financial crisis provides the perfect opportunity for them to experiment with the country's central bank digital currency (CBDC).

Nigeria CBDC wallets usage has increased by 12-fold

Wallets created for using the eNaira have increased 12-fold in the past five months, according to Godwin Emefiele, the Central Bank of Nigeria's governor.

The number of CDBC wallets currently stands at 13 million, up from around 1 million in October 2022.

According to a Bloomberg report, the eNaira transactions valuation has spiked by 63% to approximately 22 billion Naira (about $47.7 million) since its introduction in October 2021.

More than 10 billion eNaira minted

According to Emefiele, the CBDC has become the payment channel of choice for the execution of social interventions as well as financial inclusion.

This is why the country's demonetization programme led to the minting of more than 10 billion eNaira while the circulating cash supply was reduced by 68.75% from 3.2 trillion nairas to 1 trillion nairas.

CBDCs continue to trend across the globe

As of 22 March, Nigeria joins China and the Bahamas as countries with real-world use cases of national digital currencies.

Other sub-Saharan countries like Ghana and South Africa are piloting an electronic version of their countries' fiat currencies, while Zambia, Namibia, Zimbabwe, Madagascar, Tanzania, Rwanda, Kenya, and Uganda are keenly embarking on research programmes.