Nigeria is witnessing a huge leap in the adoption of the “digital naira” amid a liquidity shortage

The cash shortage in the Nigerian economy has changed the fortunes of the central bank digital currency (CBD).The digital naira) in the country, which had once struggled to see any significant adoption or attraction.

Also read: Nigeria: Central Bank reveals guidelines for open banking services

As the Governor of the Central Bank of Nigeria said, Godwin Emefieleon Tuesday, March 21, reported that digital naira transactions have increased by 63% to reach 22 billion naira ($47.7 million) since its introduction.

The total number of central bank currency portfolios jumped more than 12 times, to 13 million wallets, compared to data from October 2022.

It is worth noting that Nigeria was largely dependent on the cash economy for a long time, and the Central Bank of Nigeria wanted to change that approach by introducing the central bank digital currency, but the digital naira did not see much demand initially after its launch.

Nigeria is witnessing a huge leap in the adoption of the digital naira amidst a liquidity shortage

The currency delisting policy adopted by the Nigerian government also led to a significant drop in cash in circulation, as the currency in circulation in Africa’s largest economy fell to one trillion naira, from 3.2 trillion naira in September 2022.

The digital naira is catching up

The central bank governor explained Godwin Emily During the press conference held on Tuesday, more than 10 billion digital naira have been minted so far, 3.4 billion of which are currently in circulation.

The government is using the digital naira to pay the salaries of poor Nigerians, according to the Nigerian Social Planner, which he said Emily He contributed four million new wallets.

However, although Nigerian legislators are optimistic about adopting the digital naira, they still need to do more in improving the digital infrastructure.

Also read: Nigeria: Banks to resume dealing in recently canceled naira currencies

turn said Adesoji Solanke, He is a manager in a bank Renaissance Capital:

“They want to introduce digital naira and get people to use it, but people don’t have enough places to use it.

The challenge is that the wallet requires having a smartphone and using the internet, but if we think about the people to whom the money will be sent, they are relatively poor.

So the cost of the smartphone and the internet are just some of the barriers you face.”

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