The Story Of eNaira & The Crypto-Loving Nigeria

3 min readSep 22, 2021


Nigeria is launching its own digital currency. So, what do we know about it & how will this change the country’s finance industry?

Meet eNaira

In late August, the Central Bank of Nigeria (CBN) said that the country will work with Bitt Inc as a technical partner for launching its own digital currency, called the “eNaira”. The currency will have the same value as fiat naira (i.e., physical naira notes). Now, CBN has announced that they will launch a pilot scheme of the eNaira beginning on October 1st, 2021. It can be purchased by the general public via financial institutions (FIs) and transferred into e-wallets maintained by customers.

Central Bank Governor Godwin Emefiele said, as mentioned by Reuters, eNaira would operate as a wallet against which customers can hold existing funds in their bank account. Emefiele added that the currency would accelerate financial inclusion and enable cheaper and faster remittance inflows.

Not A Cryptocurrency

eNaira is different from a cryptocurrency. Cryptocurrency is a decentralised form of encrypted digital currency based on blockchain technology. However, eNaira is a government-controlled digital currency. The latter is said to be more stable than cryptocurrency as its value is to be a parity with the country’s official currency.

The Process

eNaira will be supplied by the CBN (from their Stock Wallet) to intermediaries (licensed FIs) for onward supply to individuals. Therefore, FIs will maintain a treasury wallet to receive eNaira from the CBN. eNaira transactions will operate on new and existing systems including the Nigerian central switch i.e. the Nigeria Inter-Bank Settlement System Plc (NIBSS). There will be four major parties in the operating mode of eNaire:

i) The CBN

ii) The licensed FIs

iii) Businesses and merchants

iv) Customers

Once eNaira is launched, the CBN will offer an interim e-wallet (the Spead Wallet) for customers until FIs can develop and launch their individual wallets.

Nigeria Loves Crypto

The concept of digital currencies is not new to Nigeria, because the country loves cryptocurrency. Cryptocurrencies have been popular in Africa for several reasons, but wealth creation is mostly the priority for most users. Inflation and low productivity have affected the strength of currencies such as Nigeria’s naira, and South Africa’s rand, driving consumers to alternatives to secure their earnings. Young Nigerians were using crypto to try to escape poverty and staggering unemployment.

But, in February, the country’s Central Bank issued a circular prohibiting FIs from dealing with local cryptocurrency exchanges and ordering the shutdown of crypto traders’ accounts. However, that didn’t stop the crypto trading. Seven months after Nigerian banks were barred from enabling cryptocurrency transactions, Bitcoin still remains an actively traded asset in the country.

The value of Bitcoin traded on LocalBitcoins and Paxful — two platforms that match crypto sellers with buyers — increased from $32 million in January and February in 2021 to over $44 million in August this year. Most of that has been on Paxful, which has 1.5 million users in Nigeria out of its global base of 7 million users.

Why eNaira?

It is clear that Nigerians love trading in cryptocurrencies, so is that why the country is launching its own digital currency? Well, it could be because several countries are launching their own while more than 80 countries are testing and researching the possibility of a central bank digital currency (CBDC).

Iyinoluwa Aboyeji, ex-CEO of Flutterwave, a Nigeria-based, pan-African payments provider told S&P Global, “It could be a game changer.” Aboyeji added, “The challenges in the financial system are the sort of challenges that a well-designed and implemented digital currency could solve.” Aboyeji also said, “The banks that develop the capability to hold the digital currency and distribute it, they will likely become much bigger banks than those who lack that capacity.”

Zooming Out

eNaira could help address several problems in Nigeria, including financial inclusion. Since banks have shut down several branches in rural areas due to the pandemic, a digital currency would give access to those who don’t have proper access to a financial network. A digital currency would also make it easier for the government to track and trace where dollars are coming from and where naira is being exchanged for dollar. So, a digital currency sounds like good news for Nigeria, and we have to wait and see whether it improves the country’s financial inclusion in the future…




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