E-naira Not A Threat – Nigeria’s Central Bank Replies to Critics, Highlights Use Cases

CBDC CRYPTO
Last updated:
Author
Author
David Pokima
About Author

David is a finance journalist and a contributor to Cryptonews.com with a keen interest in breaking comprehensive, accurate, and reliable blockchain news.

Last updated:
Why Trust Cryptonews
Cryptonews has covered the cryptocurrency industry topics since 2017, aiming to provide informative insights to our readers. Our journalists and analysts have extensive experience in market analysis and blockchain technologies. We strive to maintain high editorial standards, focusing on factual accuracy and balanced reporting across all areas - from cryptocurrencies and blockchain projects to industry events, products, and technological developments. Our ongoing presence in the industry reflects our commitment to delivering relevant information in the evolving world of digital assets. Read more about Cryptonews
Source: AdobeStock / Faraz

The e-naira continues to generate controversy on its adoption rate, use cases, and more recently, claims by some observers on the threat it poses to the economy.

The Central Bank of Nigeria (CBN) has publicly backed its digital currency the e-naira which it released to rival the growing popularity of private cryptocurrencies like Bitcoin (BTC). 

In an Oct 9 press release, the nation’s top banking regulator stated that the Central Bank Digital Currency (CBDC) is not a threat to financial stability urging all stakeholders to accept its use.

On Oct 4, local news outlet Punch reported on the dangers posed by the e-naira. It cited the CBN’s report, “Economics of Digital Currency, ” which warned about conversions from fiat to digital currency. 

The report suggests that the economy may be impacted as funds converted to digital wallets become domiciled with the top bank without access to commercial banks for loans and other financial activities.

Since its inception, bank deposit conversion to e-naira has exhibited an average monthly growth of 78.3 percent and totaled about N1.66bn [$2.1 million]. Furthermore, eNaira in circulation as a ratio of average banking system liquidity has averaged 0.1 percent, reaching highs of 0.2 percent in each of May and August 2022.” 

CBN backs the e-naira 

In the bank’s response, the stated in clear terms that its previous report does not indicate any harmful effect of the e-naira on the economy suggesting a lack of understanding of the report.

The central bank also restated the threat posed by private cryptocurrencies to the economy based on their use as speculative investments.

A recurring theme in the book is the interest of regulators, such as the CBN, in the role of cryptocurrencies as speculative investments, and the potential threat they harbour for financial stability. Pursuant to that, the articles in the book provide an in-depth understanding of CBDCs generally and the workings of the eNaira in particular, highlighting issues and challenges in implementation and adoption”

Use cases to grow

Per the press release, the bank added that it will continue improving the e-naira in structure and user interfaces across multiple platforms. 

Recently, several use cases have been announced for the e-naira as it seeks to make payments easier for traders, farmers, and students.

On the economy, the digital currency has been hailed by financial experts for widening the tax net as it adds new demographics who were almost absent from the economy leveraging on the blockchain.

More Articles

Price Analysis
$TRUMP Pumping Over 20% This Week: Presidential Memecoin Back for Good?
Arslan Butt
Arslan Butt
2025-02-15 15:26:50
Price Analysis
Study Predicts Bitcoin Surge to $1M by Early 2027: Is That Possible?
Arslan Butt
Arslan Butt
2025-02-15 14:45:43
Crypto News in numbers
editors
Authors List + 66 More
2M+
Active Monthly Users Around the World
250+
Guides and Reviews Articles
8
Years on the Market
70
International Team Authors