What is eNaira? All Answers about the Nigeria Digital CurrencyÂ
What is eNaira? It is a digital version of the cash Naira. It is called digital currency. Someone said it is the ‘Nigerian version of Cryptocurrency’. One eNaira is equivalent to One Naira.
Several countries of the world have adopted digital currency as an alternative legal tender. The increase in public adoption of cryptocurrency has motivated nations worldwide to implement local digital currencies. They are taking these steps to keep up with the trend and prevent their population from totally deserting their legal tender in favor of foreign cryptocurrencies.
Nigeria unveiled her cryptocurrency on Monday, October 25, 2021, and currently, the eNaira wallet has over 10 thousand downloads on the google play store. And it has gathered thousands of downloads on other play stores as well.
This article would provide a detailed answer to the questions that most Nigerians are already asking: What is eNaira, and what does it mean to Nigerians and the economy of Nigeria? Alright, Let’s dive right in and find answers to these questions.
eNaira is a digital currency recently issued by the central bank of Nigeria. It officially named the digital currency as Central Bank Digital Currency (CBDC). CBN unveiled the eNaira in October, making Nigeria the first country in Africa to launch a digital currency. eNaira launched with two apps; The eNaira speed wallet and the eNaira speed merchant wallet.
The digital currency was created in response to several limitations Naira has over the years: including transaction speed and remittance. The Central Bank of Nigeria has now granted eNaira the status of legal tender. It can now operate in the same capacity as the fiat Naira and can serve the same purpose.
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How Can one get eNaira?
eNaira wallet operates on android and iOS platforms and several other platforms. To get started, download the eNaira Speed wallet from Google Play Store or Apple Appstore. Set it up and then fund it using your Nigerian bank. You can fund your digital currency wallet through your regular bank app directly from your bank account or using cash through an eNaira verification agent, over the counter at a designated bank branch, or a Shared Agent Network Expansion Facilities (SANEF agent).
Why is eNaira not available on Google Playstore right now?
It is the truth that the new digital currency app is no longer available for download in the Google play store. People it was brought down by Google because of negative reviews by Nigerians who downloaded the App. But this claim cannot be substantiated as Google has not made any comment that.
Reacting to the sudden development, the Federal Government of Nigeria has told the citizens that the App was brought down by then and not by Google. They said they are rectifying bugs and stuff in the App not appropriate.
Meanwhile, the App is yet to be up as of the time of writing this post.
What are the Benefits of eNaira to Nigerians?
eNaira is a digitized version of Naira because 1 eNaira = 1 Naira. However, there are a few benefits eNaira offers that the conventional banking app can’t offer. These benefits include Transaction speed, affordability, security, and more reliable payment method. The main purpose of eNaira is to support the shift of the Nigerian economy towards the digital economy and increase the possibility of achieving a cashless economy in Nigeria.
It means that Nigerians can now carry out transactions from any part of the world without major dependence on physical currency. The new digital currency would eliminate the usual problem of forgoing your money because of the minimum availability of lesser denominations of the Naira. If you have an eNaira wallet, you can pay any amount of money no matter how small the denomination you need.
What are the Benefits of the eNaira to the Economy of Nigeria?
The federal government of Nigeria believes the eNaira would add a boost of 30billion dollars to the economy over the next ten years. It is about 0.6% financial improvement in the economy over the next ten years. They believe that the velocity of cash flow that would result from digital currency would bring about economic inclusion: Because the ease of transaction would inspire the flow of cash among the population.
Other expected benefits of the new digital currency include:
- flexibility in money handling
- Increased cross-border trade
- Accelerated financial inclusion
- Enhanced and cheaper and faster remittance inflows
- Liquidity across the country.
- Easier targeted social interventions
- Improvements in monetary policy effectiveness
- Payment systems efficiency and tax collection
- Local and diaspora payments
- Transparency in taxation systems
- Facilitation of instant cross-border forex
What are the Disadvantages of eNaira?
eNaira would not add any significant improvement to the economy of Nigeria: one can argue. The country has a total economic size of about a 500billion dollars. If the federal government hopes to pull in 30 billion dollars over the next ten years, it will cause an insignificant improvement in the economy.
The advantage of this digital currency depends heavily on the availability of infrastructure and access to the currency. Nigeria is a nation with limited penetration of telecommunication infrastructure; with about 64% of the population living in abject poverty.
Trying to solve financial inclusion through telecom technology is not the wisest approach. It is essential that Nigeria improve the telecommunication infrastructure if we hope to achieve any reasonable progress with the eNaira initiative.
Is eNaira Designed to Replace Cash?
I mean, will replace the Nigeria physical cash? The answer is no. Even the highly advanced countries still make use of the flow of cash let alone in Nigeria where the average citizen is yet to master the use of technology.
eNaira is a digital version of the cash Naira. One eNaira is equivalent to One Naira. There is no likelihood that the new digital currency would replace cash. Even if it would happen, Nigeria, presently, cannot achieve such an aim. The digital currency will circulate the same way that cash Naira spreads with a simple difference of medium.
While eNaira circulates through the digital medium, fiat Naira will circulate through banks and financial institutions. The digital currency only offers a peer-to-peer transaction process which is faster and safer than the fiat Naira. You can view that eNaira as an improvement on the Naira.
There is no point at which we would be independent of a physical transaction. However, sometimes in the future, when the entire world becomes more connected, we may switch from physical transactions to digital. But for now, fiat naira would remain in circulation with the eNaira.
Conclusion
eNaira is a welcome initiative if the Nigerian government would provide an enabling environment for the initiative to thrive. With the growing population of Nigeria and lack of productivity across the country, we must switch from fiat currency to a more advanced one. It should be an easily distributable currency to make room for the availability of funds to citizens and financial inclusion for people living in disadvantaged areas.
