The Nigerian eNaira was launched to much fanfare after delays had rocked the project. Upon launch, it made the West African nation one of the very first countries to issue its very own central bank digital currency (CBDC). Residents rushed to explore this new legal tender, at one point overwhelming the website with traffic. Now, a couple of months after the launch of the CBDC, how has it fared?
Do Nigerians Use The eNaira?
In a recent tweet, Timi Ajiboye, one of the founders of BuyCoins, Nigeria’s leading cryptocurrency exchange, asked his followers if they had ever used the eNaira. BuyCoins had been behind the NGNT, the Naira token stablecoin, which operates on the Binance Smart Chain and works as a 1:1 peg with the Naira. The responses to the tweet provided insight into how residents view the CBDC.
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Responses to the tweet which asked if people had used it and why they had used it showed that the eNaira was only known by name to the citizens. The majority admitted to never using it, while others explained that they had only used the CBDC to see how it worked.
One user explained that they had tried it but was disappointed with how it worked. “To see their onboarding. I’m not trying to shame eNaira but it was not pleasant,” the user said as they recounted their experience.
Other users laughed at the project, with some saying it was “dead on arrival.” One user said there was no reason to use the eNaira when stablecoins like USDT already existed.
What Went Wrong?
One of the problems with the eNaira project, it seems, was the government’s inability to build a sense of trust in residents before the project was launched. By all standards, the launch of the eNaira was sudden. Although the government said that the project had been in the works for years, residents of the country did not know it was coming until a couple of months before launch. Suddenly, there was a whole new legal tender in circulation.
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Another issue was access and ease of spending. One user responded to Ajiboye’s tweet that the government cannot just expect citizens to begin using the currency without intervention from the government. They suggested the government pave the way by paying out well-known welfare programs using eNaira.
“The Nigerian government should shift social welfare programs and NYSC payments to eNaira for a start,” the user explained. “It will make payments cheap and very efficient. That way, use will spike. They shouldn’t just expect us to start using it.”
Users also noted the inability to spend eNaira. There are currently little or no merchant options for those who wish to spend their eNaira, making it a near useless legal tender. However, the CBDC is still very much in its infancy and has a lot of growing to do.
Featured image from TechCabal, chart from TradingView.com