The value of eNaira transactions has surged 63% to 22 billion naira ($47.7 million) this year, while about 13 million so-called e-wallets have been opened, a more than 12-fold increase from October, said Godwin Emefiele, the Central Bank of Nigeria’s governor.
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The amount of currency circulating in Africa’s largest economy has meanwhile dropped to about 1 trillion naira from 3.2 trillion naira in September, he told reporters in Abuja, the capital, on Tuesday.
Many Nigerians have turned it’s lack of interest to use digital currency to transact, to sought after platform for transactions, after a chaotic demonetization policy gave rise to a shortage of banknotes and increased demand for alternative payment methods.
Transactions surged by 63% to $47.7 million (₦22 billion) while about 13 million e-naira wallets have been downloaded since Oct. 2022, the Nigerian central bank governor has said. Addressing local journalists on March 21, Governor Godwin Emefiele also revealed that the currency in circulation dropped from over $6.9 billion (₦3.2 trillion) seen in Sept. 2022 to around $2.2 billion (₦1 trillion).
As previously reported by Bitcoin.com News, the drop in the value of circulating naira banknotes has been attributed to the Central Bank of Nigeria (CBN)’s botched demonetization policy. After announcing its plan to circulate newly designed banknotes, the central bank gave Nigerian residents a few months to return old 200, 500 and 1,000-naira banknotes.
The perceived short repatriation period and the CBN’s failure to provide adequate banknotes of the newly designed naira sparked violent protests and pleas for an extension of the deadline. However, after the Nigerian Supreme Court ruled against the demonetization process, the CBN relented and now has said the previously demonetized banknotes will remain legal tender until the end of the year.
Yet despite the CBN’s about-turn, both new and old naira banknotes have reportedly remained in short supply and according to some Nigerian commentators, this may help to explain the sudden surge in the value of e-naira transactions.
According to a Bloomberg report, Emefiele said the increase in e-naira transactions is due to the Nigerian government’s use of the CBDC when transferring payments to marginalized groups. He also claimed that more than 4 million e-naira wallets had been opened as a result.
“The e-naira has emerged as the electronic payment channel of choice for financial inclusion and executing social interventions,” Emefiele added.
Although the CBN is thought to have minted more than ₦10 billion of the digital currency, according to the governor only ₦3.4 billion of the CBDC is in circulation.