Digital currency pilot begins in Nigeria with eNaira launch

The Central Bank of Nigeria (CBN) has unveiled its central bank digital currency (CBDC) eNaira in its pilot study named Project Giant.

The eNaira was launched following an announcement by Nigeria President Muhammadu Buhari, who said that the digital currency and the blockchain technology it uses can foster economic growth and boost GDP of Nigeria by $29bn over the next 10 years.

The CBN teamed up with Barbadian FinTech Bitt on the pilot study, which is looking to strengthen cross-border trade, boost financial inclusion, strengthen tax collection and speed up remittance inflows in Nigeria. Prior to the digital currency going live, the CBN Governor Godwin Emefiele said around 500 million eNaira had already been minted.

According to TRT World, Nigeria’s CBDC pilot is now the second largest behind China’s digital yuan, which the latter country hopes to introduce in early 2022. Nigeria is the first African country to officially introduce a sovereign-backed digital currency pilot.

eNaira will use a blockchain ledger, which will help it to eliminate the need for third parties and contribute to efficient and low-cost transactions. In addition, the enhanced oversight of funds and payments will be able to provide a level of transparency that can help to strengthen public confidence and enable financial authorities to tackle economic crime and fraud.

The CBN said the eNaira’s launch ‘marks a major step forward in the evolution of money’ and that it is commited to ensuring that the eNaira, like the physical Naira, is accessible to all.

Elsewhere in the CBDC space, the Hong Kong Monetary Authority recently begun the first steps of exploring a CBDC with the release of a technical whitepaper. The Royal Monetary Authority of Bhutan also teamed with cross-border crypto payment firm Ripple to pilot a CBDC in the region.

The Bank of Thailand also revealed it intends to begin a retail CBDC pilot study in the second quarter of 2022.

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