Central Bank of Nigeria (CBN) Seeks to Develop a Cashless Society Through CBDC eNaira

Please note that we are not authorised to provide any investment advice. The content on this page is for information purposes only.

Nigeria, the most populous country and largest economy in Africa, has been facing a financial crisis that has underscored the importance of cryptocurrencies for its over 219 million residents. Interestingly, despite the recent introduction of eNaira, a central bank digital currency (CBDC) with several benefits such as improved financial inclusion, lower transaction costs, and enhanced transaction transparency and security, the people of Nigeria have not shown much interest in it.

It’s important to note that the launch of the eNaira is taking place in Nigeria, a country facing a challenging economic situation as a result of various social and economic issues such as high unemployment, inflation, and insecurity. These challenges have resulted in the devaluation of the national currency, the Naira, and a growing demand for alternative payment methods.

Nigeria – Effects of the New Central Bank Policies

In October, the Central Bank of Nigeria (CBN), the country’s central bank, announced plans to redesign the most commonly used naira note denominations. As of January 31, the old notes will no longer be accepted as legal tender. To address this, the CBN has advised individuals to deposit their old notes at the many banks located throughout the country.

However, a shortage of new naira notes has led to a financial crisis in the country. The Central Bank only allowed 500 billion naira to be circulated, which fell short of the demand for 3 trillion naira. As a result, most banks continued to dispense the old notes to their customers in the days leading up to the deadline.

When companies began rejecting the old notes, it created a disturbance since they didn’t want to be left with the notes until they became invalid. As a result, a group of state stakeholders sued the Federal Government and the CBN, asking for an extension to the deadline.

In response, the Supreme Court issued an order suspending the deadline, allowing the old notes to continue to be used as legal tender. The Central Bank of Nigeria (CBN) has since announced that the old banknotes currently in circulation in Nigeria will remain legal tender, even with the introduction of new banknotes.

In 2019, the CBN announced a new series of banknotes with updated security features and a new design. The aim was to improve the currency’s security and durability and promote a cashless society.

Despite the introduction of the new banknotes, the CBN has stated that the old banknotes, which were introduced in 2005, will remain legal tender and continue to be accepted for transactions alongside the new banknotes. This means that individuals can continue to use the old banknotes for transactions and that banks and other financial institutions are required to accept them.

It’s worth noting that while the old banknotes are still considered legal tender, the CBN has encouraged Nigerians to use the new banknotes and exchange their old banknotes for new ones. This will help to reduce counterfeiting and improve the overall security of the currency. The CBN has also stated that the new banknotes are more durable and easier to use than the old banknotes.

Nigerians Ignore eNaira in Favor of P2P Amid Crypto Ban

Reports indicate that Nigerians are turning to peer-to-peer (P2P) cryptocurrency trading platforms following the Central Bank of Nigeria’s (CBN) ban on cryptocurrency transactions. The ban, which prohibited financial institutions from enabling cryptocurrency transactions in Nigeria, was announced in February 2021.

As a result, some Nigerians are using P2P trading websites such as Paxful and LocalBitcoins to buy and sell bitcoins. These platforms allow users to trade directly with each other without the need for intermediaries like banks or other financial organizations.

The CBN also announced the launch of eNaira, a central bank digital currency (CBDC), around the same time as the ban on cryptocurrency transactions. However, there have been reports that eNaira has not been widely accepted by Nigerians, in part due to a lack of confidence in the government and concerns about the security and privacy of digital currency.

Despite the financial crisis, the adoption of eNaira has been slow. According to an analysis using a recent IMF report as evidence, as of November 2022, there were only 942,000 downloads of the eNaira wallet.

An analysis based on a recent IMF report found that as of November 2022, there had only been a modest 942,000 downloads of the eNaira wallet. Furthermore, only 8% of the downloaded wallets are currently being used, indicating that the majority of them have remained inactive. The average transaction value of these wallets is 53,000 naira, or around $120.

According to a survey conducted by Morning Consult last year, a significant portion of Nigeria’s 63.8 million adult citizens, or 56% of the adult population, engage in regular cryptocurrency trading. This figure is higher than that of any other country. In comparison, the United States has only 43.4 million people, or 16% of the adult population who participate in cryptocurrency trading.



Live webinar speaker and derivatives (Forex, Crypto, and Indices) analyst with a broad range of skills for evaluating financial data, investment trends, technical analysis, fundamental analysis, and the best ways to strategies investment selection.  Expertise: Trading Psychology; Speculative Positioning & Market Sentiment; Technical & Fundamental Analysis.