Nigeria’s central bank digital currency (CBDC), e-Naira, has received ample attention for a while. Economic experts and industry participants have frequently expressed their opinions on the topic.
Nick Corbishley, a former Wall Street journalist, shared his opinions on the e-Naira in a Twitter post along with various other personalities with resonating views. The former WSJ journalist referred to the Nigerian CBDC and said, “a very dark experiment is underway in Nigeria.”
Recently, Nigeria is going through a very stressful time as the riots broke out across several Nigerian cities. Experts cite that the failure to convince citizens to adopt the CBDC has led to a doubling down by the Nigerian central bank.
Experts have also equated the Nigerian experiment to the Indian context. Drawing a parallel with what happened in India in 2016, in which high-value bills were demonetized, the experts pointed out that Nigerian officials played out a similar move in December last year. They also said that the Nigerian authorities are just trying to minimize the usage of cash, and their plan is working out.
The goal is to make it much more difficult for Nigerians to use cash. And it’s working like a dream/nightmare.
Given the scenario of Nigeria, sources reveal that the policy to reduce cash usage has resulted in a severe cash shortage triggering anger and disruption among the masses. The businesses in the country are refusing to accept old denominations, and a general election is scheduled to occur on February 25.
The Central Bank of Nigeria has been implementing various measures to encourage a shift to a cashless society. To this end, the bank has imposed restrictions on ATM cash withdrawals. As of January 9th, citizens are only allowed to withdraw a maximum of 20,000 NGN ($43.50) per day, with a total limit of 100,000 NGN ($217).
Experts have predicted that Nigerian authorities’ obsession with CBDC would lead to people dying and businesses shutting, turning daily life on its head in the country. Unfortunately, according to the journalist, the Nigerian government and central bank said, “the pain is worth it.” In a recent interview, Tunde Ajileye, an analyst with the Nigerian consultancy SBM Intelligence, also criticized the authorities for the ongoing tension in the country. He alleged that the government is purposely printing lesser notes and keeping citizens in pain and fear.
Nigerian CBDC, since its inception, hasn’t been able to convince the masses. Todayq News reported in October last year a Bloomberg study which revealed that a year after the launch of the government-issued digital currency, the e-Naira, less than 0.5% of Nigeria’s 217 million people are said to be using it.
Cryptocurrencies have looked out as a far better option for the citizens than the e-Naira. The population of the country is known to be most crypto-savvy in the African continent, with the highest adoption rate in the continent and 11th highest globally in 2022.
However, the government is not failing to make constant attempts to promote CBDC adoption. In mid-January, the Central Bank of Nigeria published a report which stated that over the next two years, it would investigate the use of blockchain technology to power a CBDC, the possibilities for adopting stablecoins, and the regulatory aspects of initial coin offerings (ICOs). The 83-page report, called “Nigeria Payments System Vision 2025,” discusses several ramifications for the country’s current payments landscape, with blockchain-based solutions taking center stage.