Nigeria has emerged as the most crypto-savvy region in the African continent. It has also been able to leave a mark across the globe by ranking at the 11th position. However, the current scenario is somewhat dicey, with eNaira facing the issue of technological ownership.
The CBDC has been developed by the Central Bank of Nigeria in collaboration with Bitt Inc, a tech firm based in the US. Functionalities are fine, per the reports, but the ownership is in question for the technology. Nigeria has started looking for potential partners who would bring expertise that suffice to work with Bitt Inc instead of completely replacing it.
eNaira was rolled out in October 2021, with Nigeria leading the charge for its adoption. It has not gone fairly the way it was expected to happen. Only 0.5% of the 217 million population reportedly use the CBDC. The Central Bank of Nigeria implemented withdrawal limits effective from January 09, 2023.
Residents can, at the most, withdraw 20,000 nairas every day and 100,000 nairas every week. These figures come to $43.50 and $217, respectively. Complementing this is the issuance of new banknotes with the objective of tackling money laundering and inflation.
While the last date to exchange old and new notes by the CBN has been extended a few times, it looks like the deadline could soon cease to be further extended by the Nigerian Central Bank. The original date was January 24, 2023, which was extended after facing the challenge of issuance and distribution of new banknotes. Ten more days were given, following which February 10, 2023, was set as the final deadline.
Now it has been learned that old Nigerian bills are null and void effective February 17, 2023. Naira notes worth 200, 500, and 1000 would be functional, provided they have been exchanged with the Central Bank of Nigeria.
Nigeria has been quick enough to adapt digital currency to the African continent. It has been so quick that Nigeria is now an internal example of moving ahead with changing times in the fintech segment. The country is said to have over 35% of the population (aged 18 to 60 years) holding crypto trading in the previous last year – 2022.
Cryptocurrency, especially Bitcoin, in Nigeria has been gaining traction since the time the national currency fell in terms of value. The demand for BTC has risen to the extent that it was valued at 17.5 million NGN (approximately $38,010) earlier this month in the African region.
This has encouraged Nigeria to consider a shift towards non-governmental crypto by passing legislation that enables a wide use case for crypto in the region. This is likely to give a boost to every crypto exchange in Nigeria. Babangida Ibrahim has acknowledged this fact while highlighting that the goal is to become the largest economy in Africa.
The Investment and Securities Act, 2007, is in the pipeline. Assuming it is passed, it would go on to enable the Securities & Exchange Commission of Nigeria to recognize digital currencies and digital assets as capital investments.