CBDC (Central Bank Digital Currency) is an electronic or digital token of a country’s currency that often has blockchain at its core regulated by the nation’s monetary authority or central bank.
As of the moment, all over the world, 12 countries are piloting CBDCs, out of which seven countries focus on retail CBDC, and the other five countries focus on wholesale. Africa continent is rapidly adopting retail digital currency technology while Nigeria, Ghana, South Africa, and Tunisia are all piloting CBDCs.
Nigeria with a population of 213 million is the most populous in Africa and the first on the continent to launch a CBDC project (eNaira). After the launch of eNaira on the 25th of Oct. 2021, news has been making rounds that about 17,00 transactions totaling N62million (US$151,170) have already taken place.
The Central Bank of Nigeria on Friday announced that in just 19 days after the launch of the Central Bank Digital Currency, it is picking up steam across the globe as the digital wallet for its own currency, the eNaira has 488,000 downloads in 160 countries across the globe.
In February, Nigeria put a ban on cryptocurrency trading through banks as CBN cites concerns of volatility posing risk to local investors. A report from Statista showed that Nigeria led the world in crypto adoption per capita, with 32% of respondents owning crypto assets in 2020.
However, the digital wallet (eNaira) seems to have relived the effect of the ban on many crypto traders in the country.
The eNaira is expected to roll out in three phases;
Firstly, the CBN takes responsibility for the issuance, distribution, redemption, and destruction of the currency, while it monitors the data stored on a cloud server.
Secondly, financial institutions can request the ability to issue stable coins.
While in the third phase, the Nigerian government will process its own digital payments between citizens and businesses.