Nigeria making history as the first country in Africa to launch a digital currency

Nigeria is making history as the first country in Africa to take a significant step towards the realization of a state-backed digital currency. From October 1, the country’s digital currency will be in operation. Ahead of that, the official website of the Central Bank of Nigeria (CBN) digital currency is live, Nigerian publication THISDAY reported.

According to the publication, the site recorded more than one million hits after it went live, signaling interest in the country’s digital currency initiative.

THISDAY reports that the website promises easier financial transactions, offers peer-to-peer (P2P) payments, allows users to check balances and view transaction history, and make in-store payments with an eWallet through QR code scans.

According to France 24, the new eNaira will be issued by the CBN as legal tender like the current naira currency and will operate on the Hyperledger Fabric Blockchain. It will also follow the official exchange rate.

Governor of Nigeria’s central bank, Godwin Emefiele, in a speech noted that the digital currency would be of numerous benefits to the Nigerian economy and the business community.

He said starting October 1, customers will be able to download the eNaira app and fund their mobile wallets using their existing bank accounts.

“We are going to be the first country in Africa to launch a digital currency,” he said. “It is a novel idea because we think it will facilitate trade. Nigeria being the biggest economy in Africa, this will set the tone to tell Africa that we are ready to lead, and we would indeed lead in trade, and we would make sure that happens.”

Nigeria has seen a boom in the usage of cryptocurrencies in recent years as people look to escape the weakening naira currency and offset the high cost of living.

Some other African countries have mulled the idea of starting their own digital currency to rival cryptocurrencies. Aside from Nigeria, Ghana is also racing to launch its own digital currency, e-Cedi, which is now in the trial phase. South Africa is in the research stage.

China is the first major economy in the world to introduce digital currency known as the digital yuan.

In 2020, the Nigerian government issued a statement banning dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges.

Nigeria is Africa’s biggest cryptocurrency market with over 600,000 bitcoins, valued at $566 million, between 2015 and 2020. Since 2017, the volume of bitcoin trade in Nigeria has increased by 19% while the highest volume of trade (20,504.50) was recorded in 2020.

The West African nation and Africa’s biggest economy trails only the United States on Paxful, a leading peer-to-peer bitcoin marketplace. The sharp rise in bitcoin trade, particularly in 2020, has been attributed to the lockdown and the “End SARS” protest across Nigeria.