Nigeria has been ranked as one of the top three countries globally where Central Bank Digital Currency (CBDC) is gaining momentum, alongside the Bahamas and Jamaica. A report published by the U.S.-based Atlantic Council on Tuesday revealed that, as of September 2024, only these three nations have fully launched their CBDCs.
The report noted that CBDC issuance has significantly increased in Nigeria and the Bahamas. Nigeria’s journey into CBDC began in October 2021 when the Central Bank of Nigeria (CBN) launched the eNaira, making it the first African country to do so and the second in the world after the Bahamas’ “Sand Dollar” in 2020.
Globally, the exploration of CBDCs is expanding rapidly, with 134 countries and currency unions, representing 98% of the world’s GDP, currently studying the technology. Of these, 66 countries are in advanced stages, either in development, pilot, or full launch phases, as revealed by the Atlantic Council report.
The report further highlighted that 44 ongoing CBDC pilot projects are underway globally, including the digital euro. Notably, European nations, both within and outside the eurozone, are actively testing wholesale CBDCs, both for domestic use and cross-border transactions.
The Atlantic Council also pointed out that all original BRICS member states—Brazil, Russia, India, China, and South Africa—are piloting their own CBDCs. China leads the way with the world’s largest CBDC pilot, the e-CNY, which has facilitated nearly 7 trillion yuan ($987 billion) in transactions since its inception.
Other major strides include the European Central Bank’s multi-year digital euro pilot and the United States’ recent involvement in a cross-border CBDC project, in collaboration with six other central banks. The U.S. had previously been slow to pursue a digital dollar.
While Nigeria’s eNaira was a trailblazer on the continent, its adoption has faced challenges. The International Monetary Fund (IMF) reported that public engagement with the eNaira has been low, with only 1.5% of wallets conducting weekly transactions, even in the wake of cash shortages and regulatory disputes with Binance.
To address the low adoption, the CBN signed a Memorandum of Understanding (MoU) with blockchain firm Gluwa earlier this year. The partnership aims to leverage blockchain technology to enhance financial inclusion and improve the functionality of the eNaira, as Gluwa becomes an official Partner Agent of the CBN.