According to the governor of the Central Bank of Nigeria, the local government’s digital currency has experienced a significant surge in transaction volume since its launch, with an increase of 63% to reach a transaction volume of $47.7 million.
Godwin Emefiele revealed that, initially, after the central bank digital currency’s launch in October 2021, the local population showed limited interest in CBDC.
However, the Nigerian government’s recent demonetization of the Naira, which was carried out to combat inflation and money counterfeiting, significantly reduced the amount of cash in circulation.
The figure has dropped from 3.2 trillion naira in September 2022 to 1 trillion naira currently, contributing to an increased demand for the state stablecoin eNaira.
As a result, the total number of digital naira wallets has increased over 12-fold to 13 million, with the volume of transactions using CBDC increasing by 63% to 22 billion naira ($47.7 million).
Comparatively, transactions worth 4 billion naira (about $9.3 million) were made with eNaira as of August last year. The authorities have already issued over 10 billion eNaira, with 3.4 billion coins already in circulation, and the government plans to utilize digital naira for social payments.
Despite the government’s optimistic view of eNaira, some locals believe that the state stablecoin’s infrastructure needs improvement as a digital wallet requires a smartphone and internet access, which may not be accessible to poor people, thus slowing down the pace of digital naira adoption.
Since the introduction of strict cash withdrawal restrictions in Nigeria at the beginning of the year, there has been a sharp increase in demand for Bitcoin and cryptocurrencies among local citizens.