A Nigerian crypto leader, Etienne Okeke has implored the Federal Government of Nigeria to permit the use of eNaira wallets for crypto transactions. Etienne, the CEO and Co-Founder of BitBarter, a Nigerian crypto company, said this during a panel session on the topic: The Future of Payments in Africa. The session was part of the activities at the third edition of the largest crypto gathering in Africa, Technext Coinference 2023.
According to Etienne, one quick way to drive the adoption of the Central Bank Digital Currency (CBDC) is for the government to work with crypto leaders and innovators in a way that will open up the currency for use by crypto companies and traders in general.
“The conversation around eNaira adoption and also crypto fintech companies being a gateway for that e-naira to be adopted is something that is lacking and we could really look at that. Especially right now that bank accounts are not allowed for crypto transactions and companies, e-Naira might be a rail, there’s no stoppage on you not using eNaira for your OTC transactions or whatever you’re doing,” he said.
Etienne believes the government will still think about use cases. He believes this is where fintech companies playing in the crypto space could come in because there are several ways these financial technology companies could create some use cases for the digital naira. All the government then has to do is support the companies and adopt their use cases.
The problem with the eNaira
The Nigerian Central Bank digital naira was launched on October 25 2021, by the then Governor of the Central Bank of Nigeria (CBN), Godwin Emefiele. This was more than three weeks after the initial proposed launch date of October 1. According to a statement by the CBN at the time, the postponement was in consideration of other activities lined up for Nigeria’s Independence Day celebrations.
We may never know why it eventually took three weeks to be done with Independence Day celebrations, but such uncertainty was already a pointer to how well thought-out (or otherwise) the project was.
Within its first three days of going live, the eNaira app was pulled down from the Play Store. By then, the app/wallet had gathered just 100,000 downloads while users complained of sign-up issues. One year after its launch, the CBDC was still struggling
This was despite several efforts by the government to boost adoption like the introduction of USSD codes, recharge vouchers and ATM withdrawals. The government even partnered with an American digital finance company, R3 to save the eNaira, all to no avail.
The currency will witness its highest adoption rate yet during the naira redesign saga which caused a scarcity of naira
While admitting that adoption might be low, Etienne pointed out that it doesn’t necessarily mean people are not using the CBDC. Making a dichotomy between retail and big merchants, he explained that the retail side of things was the problem as it was difficult getting retailers on board. He, however, said merchants who were moving cash in bulk are already in on the trend.
So the numbers you see, I guess they are right because those numbers can be moved by very few people. But in general, when you see the World Bank complaining about the eNaira wallets not being activated, they might be right because the retail side isn’t really pushing right now,” he said.
Speaking about the reasons for the poor adoption, Etienne noted that the problem is with the naira itself. He said we as Nigerians don’t flow with the naira. This makes a lot of sense seeing as Nigeria’s fiat currency continues to diminish in value with each new day.
As such, Nigerians prefer to save their funds in foreign currencies like the dollar etc. So when the government makes a digital currency which is like a mirror of the naira, it is also going to be affected by that indifference.
He, however, called on the CBN to heed the call of Nigerian fintech companies operating in the crypto space to help out as they could have the keys to unlocking the immense potential of the e-naira.
