Many Nigerians are optimistic as Africa's largest economy gears up to launch the continent's first central bank-backed digital currency, the eNaira.
Authorities hope to tap into the popularity of cryptocurrency so it can better monitor digital currency transactions, curb black-market trading in the paper naira and also help integrate millions of Nigerians into banking. But critics say the digital currency will also give Nigeria's central bank more control.
The launch of the Central Bank of Nigeria (CBN) digital currency, or the eNaira, was initially scheduled for October 1 as part of activities to mark Nigeria's Independence Day – but was postponed by authorities. The CBN’s communications director, Osita Nwanisobi, did not disclose the new launch date in a statement released on the bank's social media handle.
But local reports say the eNaira website recorded more than one million hits in the hours ahead of the initial launch - what blockchain experts like Janet Kaatyo say is a welcome development.
"It is going to make cross border payments easier and it is going to make it easier for the naira to be widely used and accepted," said Kaatyo. "So, Nigeria is gradually getting to the point where cryptocurrency is seen as an unstoppable force."
Kaatyo believes the eNaira will promote blockchain technologies like cryptocurrency, which Central Bank authorities banned in back in February, citing its volatility and investment risk for citizens.
The CBN then promised to provide a safer alternative - the eNaira. Authorities and experts say the eNaira will ease monetary transactions and improve long-term value for Nigeria's currency, compared to its paper counterpart, which has hit its lowest value since 2003.
The CBN also says the eNaira saves on printing and distribution costs for cash. Digital strategist, Daniel Yerimah says the eNaira will also help address money laundering and corruption.
"Everything built on blockchain is very safe and secure. Another thing again is it's universal, parts of the benefits they intend to achieve with the eNaira is it will be used for both international and local trade and also it's going to be to fight corruption," Yerimah said.
But some experts warn the emergence of the eNaira will cut off roles played by intermediary banks and give the central bank more control over citizens’ financial rights. However, blockchain analyst Jadel Chidi disagrees.
"There's a direct link between the Central Bank and the individual who uses the eNaira but that will not put the other banks out of business," Chidi said. "What I see is that the CBN will eventually create a portal where each eNaira user will be able to access their e-wallet through the database they already have with their bank."
In recent years Nigeria has seen a move toward cryptocurrencies as citizens looked for alternatives to the weakening naira. Now millions are waiting to see if they can benefit from Nigeria's digital curr