As central bank digital currencies begin picking up steam around the world, the Central Bank of Nigeria announced on Friday the digital wallet for its own digital currency, the eNaira, has been downloaded 488,000 times in 160 countries — in just 19 days after its launch.
Fast facts
- According to local news reports, after President Muhammadu Buhari launched the eNaira on Oct. 25, about 17,00 transactions totaling N62million (US$151,170) have already taken place. With a population of 213 million, Nigeria is the most populous in Africa, and is also the first on the continent to launch a CBDC project.
- Cryptocurrency trading through banks has been banned in Nigeria since February, with the CBN citing concerns over volatility posing risks to local investors. The eNaira wallet seems to have cushioned the blow for the many crypto traders in the country; a report from Statista found that the country led the world in crypto adoption per capita, with 32% of respondents indicating they had owned crypto assets in 2020.
- The eNaira will be rolled out in three phases; the CBN is responsible for the first which includes issuance, distribution, redemption and destruction of the currency, while it also monitors the data stored on a cloud server. In the second phase, financial institutions can request the ability to issue stablecoins, while in the third, the Nigerian government can process its own digital payments between citizens and businesses.
- Africa is a continent that is rapidly adopting retail digital currency technology. In addition to Nigeria, Ghana, South Africa, and Tunisia are all piloting CBDCs.
- In October, Ghana was looking for a solution to enable its retail CBDC e-Cedi to trade offline. South Africa started the second phase pilot of wholesale CBDC Khokha in February for inter-bank transactions. West African country Tunisia cooperated with France to launch the fifth wholesale CBDC pilot for inter-bank transactions without the SWIFT system between the two countries in June.
- Until now, all over the world, 12 countries are piloting CBDCs, of which seven countries focus on retail CBDC, and the other five countries focus on wholesale.
- In Asia, China is promoting retail CBDC, the e-CNY, and generated 62 billion yuan (US$9.7 billion) transaction volume as of the end of October. South Korea has stepped into the first phase pilot of CBDC by using a virtual environment to test the technical feasibility of the currency issuance, distribution, and redemption. Cambodia’s Project Bakong has amassed over 200,000 users as of June, and in the first half of 2021, the transaction volume hit 1.4 million transactions valued at $500 million.
- Cross-border CBDC programs are emerging such as the mBridge project between Hong Kong, China, Thailand, and UAE, and the real-time funds transfer service between Cambodia and Malaysia.