FameEX Hot Topics | Digital Currency Transactions in Nigeria Jump 63% According to Central Bank Chief

Nigeria's central bank digital currency (CBDC) transactions have seen an impressive 63% increase in value to $47.7 million (₦22 billion), according to Governor Godwin Emefiele. The growth occurred between October 2022 and March 2023, indicating a significant uptick in digital transactions in Nigeria.In addition to the increase in CBDC transactions, Governor Emefiele announced that approximately 13 million e-naira wallets have been downloaded since October 2022. This suggests that there is a growing interest in digital currencies in Nigeria, and that more people are looking for ways to access and use these innovative financial tools.

The governor also revealed that the amount of currency in circulation had dropped significantly, from over $6.9 billion (₦3.2 trillion) in September 2022 to around $2.2 billion (₦1 trillion) in March 2023. This is a dramatic reduction in the amount of physical currency in circulation, and may be linked to the CBN's botched demonetization policy.The demonetization policy, which aimed to replace old banknotes with newly designed ones, was met with significant resistance from Nigerian residents. The short repatriation period and lack of new banknotes led to protests and pleas for an extension of the deadline. However, after the Nigerian Supreme Court ruled against the demonetization process, the CBN relented and now says the previously demonetized banknotes will remain legal tender until the end of the year.

This policy failure may have contributed to the rise of digital currency transactions in Nigeria. With physical currency in short supply, many Nigerians may have turned to CBDCs and other digital payment methods as an alternative. The growth in e-naira wallet downloads and CBDC transactions suggests that digital currencies are becoming an increasingly important part of Nigeria's financial landscape.The CBN has been at the forefront of the push for digital currency adoption in Nigeria. In October 2022, the bank launched the e-naira, a digital version of the national currency that is designed to provide a faster, cheaper and more secure way to make transactions. Since then, the bank has been working to promote the use of digital currencies and to educate Nigerians about the benefits of these innovative financial tools.

Overall, the rise of digital currency transactions in Nigeria is an encouraging sign for the country's financial system. With more people embracing these technologies, Nigeria may be able to build a more robust and efficient financial infrastructure that can better serve the needs of its citizens. The adoption of digital currencies can also help to reduce the cost of doing business, promote financial inclusion, and increase the efficiency of the payment system. As such, it is essential for the government and financial institutions to continue to support the growth of these technologies in Nigeria.

Disclaimer: The information provided in this section is for informational purposes only, doesn't represent any investment advice or FameEX's official view.