Nigeria officially launches its eNaira digital currency, backed by central bank

Nigeria officially launched a digital version of its currency, eNaira, after its launch was delayed in early October, President Muhammadu Buhari announced Monday.

With this launch, Nigeria, Africa's first economy in terms of GDP and the continent's most populous country, with more than 200 million inhabitants, is a pioneer on the continent, along with Ghana, which has been testing its E-Cedi since September as a new form of monetary exchange.

"lately, the use of coins in business and payments has decreased," he explained. According to him, the trend has been "exacerbated since the beginning of the pandemic and with the birth of a new digital economy".

The eNaira seeks to facilitate online transactions, the President said, but it should also "attract more and more people and companies in the formal sector and thereby increase the country's tax revenues," he said.

Around the world, central banks seek to create digital versions of their currencies in the face of the growth of online payments and to compete with cryptocurrencies that are beyond state control or global regulators.

Cryptocoins are very popular in Nigeria, which in 2020 ranked third in the number of virtual coin users, after the United States and Russia, according to a Statista cabinet study.

With them, Nigerians try to evade the constant depreciation of the naira in recent years and can receive money from the diaspora or send remittances more easily.

However, eNaira is not a cryptocurrency, but the digital equivalent of Nigerian physical currency, the naira. It is issued by the central bank and is subject to the official exchange rate.

Nigerians can download the eNaira app and fill their mobile portfolios using their bank accounts.

Last year, China became the first major economy to launch the version of a digital, trial currency. Since then, at least five countries have launched their virtual currencies and fourteen others, including Sweden and South Korea, are in a pilot phase, according to the American think tank Atlantic Council.

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