eNaira: Pioneering Nigeria's Digital Financial Revolution

by Chaindustry 2nd February, 2024
4 mins read

The primary objectives of eNaira were to boost financial inclusion, enhance cross-border CBDC transactions, simplify diaspora remittances, and supplement existing payment infrastructures. However, despite these ambitious goals, adopting the digital naira has been modest.

Introduction In a time when physical currency is diminishing, digital financial transactions have gained prevalence, especially during the COVID-19 pandemic. This global shift has been driven by the emergence of distributed ledger technologies (DLTs) like blockchain.

Central Bank Digital Currencies (CBDCs) have become pivotal in this evolving landscape. Unlike traditional physical currencies, CBDCs are digital currencies issued and overseen by governments. While sharing some characteristics with cryptocurrencies, a key distinction is that national digital currencies are pegged to and mirror the value of the country's official fiat currency. As individuals gravitate towards digital financial ecosystems, CBDC development offers a strategic avenue for central banks to navigate and shape the future of monetary transactions.

eNaira: Nigeria's CBDC eNaira, Nigeria's CBDC, is a digital rendition of the national currency, the naira, and can be used the same way as cash. It embodies the Central Bank of Nigeria's (CBN) effort to harness digital technologies for the advancement of financial inclusion, payment system efficiency, and broader economic development.

Addressing Financial Inclusion Challenges The eNaira is designed to propel financial inclusion in Nigeria, aiming to boost financial stability and accountability in the informal sector and streamline remittance processes. Approximately 36% of the Nigerian population is unbanked, and the eNaira seeks to address this gap by providing a means for a broader population to participate in and benefit from the evolving digital economy.

The Journey of eNaira: From Inception to Expansion The roots of the eNaira trace back to the CBN's initiation of the Cashless Policy in 2012. The turning point for eNaira occurred in February 2021 when the CBN announced its plan for a CBDC pilot. On Oct. 25, 2021, Nigeria launched eNaira, making history as the first African nation to launch its digital currency. The adoption of eNaira faced challenges, but the Central Bank initiated the second phase in August 2022, aiming to expand the user base to 8 million. Since October 2022, the number of eNaira wallets has surged over 12 times, reaching 13 million. The value of transactions has witnessed a 63% upswing, totaling 22 billion naira ($48 million) in 2023.

Technological Foundation: Architecture and Infrastructure The eNaira's architecture embraces a forward-thinking platform model that involves constructing a technology platform aligning with existing structures in the payment system. The platform encourages interoperability, allowing financial institutions and payment service providers to collaborate seamlessly.

The infrastructure of eNaira involves collaboration with Bitt Inc., a Barbados-based fintech company. The Numa architecture operates on ISO 20022 messaging standards, enhancing programmability and interoperability. It was built on DLT, specifically the Hyperledger Fabric variant. The eNaira's foundation can process over 2,000 transactions per second.

Diverse and User-Centric eNaira Wallets The eNaira introduces various wallets designed to meet specific needs and enhance the user experience. The Individual Wallet, Edu Wallet, and Merchant Wallet cater to different demographics and purposes. To access the eNaira, whether as a consumer or a merchant, users need to download the wallet app from the Google Play Store or the Apple Store.

Challenges and Opportunities Despite its ambitious vision, eNaira has faced criticism and challenges—the centralized nature of its private blockchain and concerns about government monitoring challenge conventional blockchain principles. Building trust in blockchain technology in Nigeria remains challenging.

As eNaira gains momentum, its future presents both challenges and opportunities. From activating smart contracts to fostering global collaborations, eNaira aspires to transform transactions, catalyze economic growth, and symbolize Nigeria's commitment to technological innovation.


In this digital frontier, eNaira emerges not just as a sovereign digital currency but as a symbol of Nigeria's commitment to technological innovation, financial inclusion, and resilience in the face of a rapidly changing world. As users and businesses adapt to this new economic paradigm, eNaira's Journey unfolds as a chapter in the larger digital transformation narrative, shaping the future of economies worldwide.

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