Nigerian Court Gives Green Light To eNaira CBDC
Last updated on November 1st, 2022 at 12:09 am
The Federal High Court of Nigeria has given the go ahead for the rollout of a Central Bank Digital Currency (CBDC). The regulator now joins the list of other global regulatory bodies that are approving the use of CBDCs as legal tender.
Over the last several months there has been increased talk about CBDCs. This talk includes backing from the IMF. Some of the countries working diligently as creating and deploying a CBDC include Indonesia, China, South Korea and Sweden to name but a few.
The Nigerian CBDC, also known as the eNaira, is a digital currency that will be issued by the country’s central bank. Moreover, the eNaira will be supported by the eNaira wallet, a cryptocurrency wallet that has also been developed in the country.
eNaira Rollout
In a federal court hearing held on October 2, led by Justice Taiwo Abayomi Taiwo, Nigeria’s CBDC issuance now has received the green light. The news was also confirmed by a local publication. Details from the official website of the eNaira states that the digital currency will be soon available and that anybody will be able to hold it.
The rollout of Nigeria’s eNaira has been making headlines recently because the country had planned for the launch of the digital currency to match the 61st Independence Day in the country, which was on October 1.
Just like in many countries that have launched CBDCs, the eNaira will be used alongside the country’s fiat currency. The teams behind the development of this digital currency have stated that it will offer a faster, cheaper and more secure way of conducting financial transactions.
On the other hand, the country’s efforts to launch the eNaira also come at a time when Nigeria’s fiat currency is depreciating. Currently, the eNaira stands at the lowest value since 2003.
Crypto Adoption in Africa
The growing levels of crypto adoption in Africa has continued to intrigue market analysts. A recent survey conducted by London-based firm, Luno, stated that crypto adoption in Africa was more prevalent in Kenya, Nigeria and South Africa.
Furthermore, the report showed that the majority of crypto investors on the continent venture into this sector to secure their children’s future education.
The survey results further stated that in Nigeria, around 55% of people do not have any knowledge about cryptocurrencies. This demonstrates that much still needs to be done to educate the public about digital currencies, given that the eNaira rollout is now underway. This has been further highlighted by recent issues within the country regarding confusion on citizens within Nigeria being able to interact with crypto.
Another report by Cointelegraph further stated that Nigeria was among the African countries that had seen the highest growth in crypto adoption. The country’s crypto market has grown by around 1200% from July 2020 and June 2021. This adoption coincides with a period of increased bullish sentiments across the broader crypto market.
Chainalysis, an analytics firm, recently published a report that attributed the rising crypto adoption in Africa to the growth of peer-to-peer platforms, uncertainties over inflation levels and banking restrictions. With most banks restricting crypto trading, traders have been forced to look for alternatives in P2P platforms that offer an open and transparent way of engaging with the crypto market.
The Chainalysis report further shows that Africa has the largest share in the global crypto retail market. The booming adoption has also seen the region attract investments.
Recently, Yellow Card Exchange, a crypto brokerage firm operating in the country, secured $15 Million in a Series A funding round that attracted major crypto players such as Coinbase Ventures, Square, Blockchain.com ventures among others.
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