Nigeria seeks tech partners to revamp the eNaira
Nigeria is in talks with potential technology partners to develop a new system to manage its central bank digital currency.
By Anna B Kiwanuka
Nigeria is in discussions with potential technology partners to create a brand-new system to control and manage the digital currency used by its central bank, the eNaira.
Bloomberg reported that the Central Bank of Nigeria wants to develop its own software for the digital currency so that it can keep full control of the effort, according to two people familiar with the matter who asked not to be named because the matter is confidential.
According to Bloomberg, the Central bank has discussed the plans, which are in the early stages with New York-based technology firm, R3.
Bitt Inc., which has offices in Draper, Utah, helped the West African nation issue its central bank digital currency, or CBDC, in October 2021, making it the first country to deploy the novel form of money on the continent. A new partner won’t take over Bitt’s job immediately, but would help the central bank meet its long-term aspiration to control the underlying technology, the sources said.
Bitt Inc., which has offices in Draper, Utah, helped the West African nation issue its central bank digital currency, or CBDC, in October 2021, making it the first country to deploy the novel form of money on the continent.
Bloomberg also reported that the central bank spokesperson didn’t respond to a phone call or text messages seeking comment. The R3 also declined to comment.
Bitt in a written statement said that it is aware that its partner, the CBN, works with various service providers to explore technical innovations for their digital infrastructure. The company added that it continues to work closely with the Nigerian central bank and is currently developing additional features and enhancements.
Nigeria is one of the nations at the forefront of efforts to create and promote blockchain-based digital equivalents of their traditional currencies, but like the majority of them, it has had difficulty gaining widespread adoption.
Nonetheless, many central banks around the world are developing comparable initiatives. Their aspirations are motivated by the requirement to stay up with private-sector advancements in digital payments, which have encouraged customers to become cashless and given rise to cryptocurrencies and stablecoins.
Critics of CBDCs have raised concerns that the tokens are a solution in search of a problem, could destabilize commercial banks, and would exclude those consumers and businesses that still rely on cash.
In Nigeria, only about one million people in a nation of more than 200 million had downloaded digital wallets to store the eNaira as of October and transaction volumes have been negligible, according to the central bank. The regulator is aiming to boost adoption through an eNaira redesign and cashless policy announced four months ago.