The excitement about the E-Naira Digital Currency is minimal across the country; despite the awareness by top commercial banks in Nigeria, it is being widely criticized following the ban of Cryptocurrency by the Central Bank of Naira.
With the mixed reactions of Nigerians, I will be looking at the likelihood of the E-naira being a product that has a very brief product life cycle that rises quickly in popularity but then declines about as quickly. The E-naira was seen by few people as a good idea but many ask if it was the right step to take following the ban of Cryptocurrency in the country.
E-Naira digital currency was launched on October 25, 2021. According to the report of restofworld.org published on November 19, 2021, it was seen as a game changer that will transform commerce in Nigeria being the first country in Africa to introduce digital currency across the continent. It was seen as the alternative to ban of Cryptocurrency by the Central Bank of Nigeria.
According to report by imf.org published on November 16, 2021: E-Naira use blockchain technology such as Bit coin and Ethereum, it can be stored in digital wallet and can be used for electronic transaction and transfer across the world at no cost.
Despite these features, the E naira is not seen as a national asset but a digital form of currency that draws its inspiration from the Physical currency but again we ask of what benefit is this to an economy with an inflation of 18% and a huge rise in the rate of unemployment.
What will the invention of the E-Naira solve in scathing economy as Nigeria? A question that lingers on our minds each time we think of the invention and the controversy around it.
CBN instructed that Banks and Financial institution to close the account of individuals that is engaged in crypto transaction as reported by premium times published in the month of September, 2021.
The directive from the Central Bank of Nigeria sparked a negative reaction among people in Nigeria, prompting them to ask if they can still buy bitcoin and engage in crypto transaction despite the directive from the Central Bank of Nigeria not to facilitate the crypto transaction.
The Central Bank of Nigeria stated that it was not comfortable with crypto transactions and it will continue to educate the masses to stop using digital assets to protect the financial sector from cyber criminals.
The invention of the E-Naira Digital Currency after the suspension of crypto trade raised a lot of suspicion among traders and investors across the digital market. Despite the controversy of copyright infringement between Central Bank and the Federal High Court that stalled the initial date of launching the application on October 1st.
The launching on October 26 raised enormous doubt amongst the Nigerians, asking the question of what CBN wants to achieve with the application inspite of the crypto ban in Nigeria.
The E Naira Digital Currency was created for the following reasons which include the increase in financial inclusion: There are 38 million out of the 200 million Nigerians with an average of 36% as reported by imf.org on November 16 do not have bank accounts.
To achieve this aim, the Central Bank of Nigeria should engage remote areas such as the villages and rural communities raising awareness on how people can access and register their bank accounts to achieve this aim. Accessibility is a major factor required to achieve this aim, the Central Bank of Nigeria must work together with Microfinance and Commercial Banks in the remote areas to achieve this aim.
Facilitation of remittance and the reduction of informality are important factors that led to the invention of the E-Naira Digital Currency. For the establishment of the E Naira Digital currency it was important to ensure that transactions are made easy and proficient.
What Needs To Be Done To Make The E-Naira a Success.
It is required that the Central Bank of Nigeria improves on its network coverage, working together with tech companies in Nigeria to ensure this application is available and effective for this aim to be attained. It is important that the Central Bank builds a good relationship with tech companies and desist from restricting them from the building financial technology that facilitates digital trade and transactions.
E-Naira Digital Currency will be a success in Nigeria, if the Central Bank of Nigeria permits other bit coin or crypto markets to thrive across our digital space. There is a need for the CBN to reconsider its decision if it aims to win the heart of Nigerians with the app.