The Central Bank Digital Currency (CBDC) otherwise known as the eNaira, is undergoing what may be termed ‘cautious adoption’ by users just like the cases of the previous technology- driven payment platforms (Automated Teller Machines, Debit Cards, and Point of Sale- POS) when they were introduced. Despite the pessimism that heralded the introduction of Debit Cards and POS, in the early stages of its introduction, they have become indispensable means of financial transactions in the daily life of Nigerians.
Such is the current cycle of the eNaira. As one of the latest technology- driven mode of payments, it is not surprising that caution and doubts are still being expressed in adopting eNaira by greater majority of Nigerians. Perhaps, the delay in adoption may be due to lack of understanding of the eNaira’s intrinsic advantages over other modes of payments or the initial resistance that is usually exhibited before embracing change.
However, there is air of optimism and relief going by CBN’s plans to relaunch the eNaira, having infused more technological innovations into it since it was first launched in October, 2021. The expectation is to make eNaira a household partner for merchandising transactions within and outside the shores of the country given its unique advantages over other payment systems.
The evolving technological innovations and advantages of the eNaira were highlighted by the duo of Dr. Khalipha Nuhu, Officer, Information Technology Department, CBN and Mr. Daniel Awe, Head, Africa Fintech Technology while reviewing the adoption rate of eNaira in a live Television programme recently.
According to Dr. Nuhu, the CBDC being the first in Africa is passing through a learning curve. He aknowledged that there are challenges but added that such challenges and feedbacks have been addressed through the innovations the apex bank have so far introduced after its launch.
“It has been a learning curve. It’s been an extraordinary journey. We’ve seen a lot of optics, we’ve seen a lot of challenges and we’re moving towards ways to improve the adoption. As it is, we are currently working on the relaunch of the eNaira wallet both mobile Application and Web wallets.
“In terms of the challenges, there have been a lot of people asking us, you introduced eNaira, where can you spend this money? It is not just about having a wallet. All these feedbacks have been taken. We are doing a lot of work onboarding merchants, that is, where people can go and spend this eNaira. We have redesigned the wallet to improve the technology and added more features and adoption is very important. We’ve collaborated with Africa Fintech Technology to run Hackathon, which is a way of sourcing ideas to solve societal and business problems. So, that’s one of the major things we now do in terms of adoption”, he stated.
Dr. Nuhu dismissed the insinuations that eNaira is tantamount to Cryptocurrency since it uses Blockchain technology. He explained that Cryptocurrency is also not Blockchain but makes use of Blockchain technology advantages. He added that the use of Blockchain technology (which eNaira adopts) gives one the ability to harness its technological advantages to improve people’s lives, make trades and businesses easy and move people from the informal sector to the formal sector of the economy with the attendant advantages. He stated that with the use of Blockchain technology, “you can increase remittance of taxes, and can easily get data and be able to make databased decisions for SMES and other businesses.”
On his part, Daniel Awe, Head, Africa Fintech Technology, which is working in concert with the CBN for technological innovations of eNaira, noted that eNaira is a payment platform rather than money to be spent. “But the concept of the eNaira is a platform that is meant to source for funds. We are working with the Central Bank to bring innovations and solve problems, solving real life problems where people will see the value of the eNaira, “he stressed.
According to Mr. Awe, “So many people have asked the question that since they can go on their mobile bank app and transfer money from one bank to the other, so what has the eNaira come to do differently? But absolutely in the long run, the capability that the eNaira will bring; the normal transfer of mobile app, will not be able to match it. For example, if you want to pay someone in China, you can right there in your mobile phone, pay the person directly into his account in China without even going through the banking sector. So, that is the kind of capabilities that the eNaira will bring eventually.”
He noted that Africa Fintech Technologies is working with the CBN to create those innovations, bring in those real cases and solve problems that will make the entire financial sector see the opportunities in the use of the eNaira. He stated that the manner we transfer money today is quite expensive when looked at from the global perspective.
“When you want to send money from Nigeria to the United Kingdom, United States of America, and for other cross border transfers to execute international trade, it is quite expensive. By the time we get to the maturity level of eNaira, it becomes cheaper, faster, more efficient and you can break more boundaries, you can do things that are not possible today based on the fiat currency which is the normal Naira which you can spend on your mobile phones, internet banking among other existing channels.
“I can tell you that with time, Nigeria being the first to introduce it globally, within the next three years and with the way technology is moving, there will be so many possibilities that the eNaira will be able to achieve, “he averred.
Going by the innovations and advantages of the eNaira, and the greater understanding that the relaunch is expected to build, it is most likely that the eNaira will, in no distant time, be embraced to further enhance financial inclusion.
Clement Nwoji is a business analyst and public affairs commentator based in Abuja