According to Nigerian Central Bank Governor Godwin Emefiele, central bank digital currency or e-naira transactions have increased 63% to $47.7 million, with around 13 million wallets downloaded since October 2022.
The Governor credited the boost in the value of CBDC transactions to the use of the e-naira by the Nigerian government when transferring social welfare funds to marginalized groups.
The value of Nigeria’s central bank digital currency (CBDC) transactions increased by 63% to $47.7 million (22 billion), with approximately 13 million e-naira wallets downloaded since October 2022, said Emefiele.
However, the country’s currency in circulation fell from more than $6.9 billion (3.2 trillion) in September 2022 to around $2.2 billion in September 2023. (N1 trillion).
The Central Bank of Nigeria’s (CBN) botched demonetization policy has been blamed for the drop in the value of circulating naira banknotes.
Following the announcement of its plan to circulate newly designed banknotes, Nigerian residents were given a few months to return old 200, 500, and 1,000-naira banknotes.
The perceived short repatriation period, as well as the CBN’s failure to provide sufficient banknotes of the newly designed naira, sparked violent protests and requests for a deadline extension.
According to TechEconomy, after the Nigerian Supreme Court ruled against the demonetization process, the Central Bank of Nigeria (CBN) relented and now says previously demonetized banknotes will remain legal tender until the end of the year.
Despite the CBN’s change of heart, both new and old naira banknotes are said to be in short supply, which some Nigerian commentators believe may explain the sudden increase in the value of e-naira transactions.