Problem And Prospect Of E-naira In Nigeria


Chapiter 1




1.1 The study’s context


Throughout history, monetary developments have been prompted by shifting economic conditions, advancing technology, and the desire to successfully carry out the functions of money. These findings suggest significant adjustments to the retail payment landscape, including a decline in the use of cash. The upshot of this wave was the creation of digital money.


According to Gilbert, Scott, and Loi, Hio. (2018), digital currencies are similar to traditional currencies in terms of attributes but, unlike currencies with printed banknotes or minted coins, do not frequently take the shape of tangible objects. The absence of a physical form makes it possible to conduct online transactions almost instantly and does away with the expense of sending cash and coins. Since they have the advantage of speedy settlement, particularly in online communities, digital currencies will continue to be useful for inter-party transactions as long as both sides recognise the currency’s legality. The majority of governments around the world have refrained from endorsing and legitimizing transactions carried out through such channels, despite the fact that cryptocurrency is the most well-known type of digital currency. As a result, there are thousands of them in the modern world, each of which operates and enjoys security thanks to the respective encryption codes mutually adopted by the parties in such transactions.


A number of governments throughout the world, including Nigeria, have started to show interest in digital currency activities as a result of the growing popularity of the currency, with the CBDC option emerging as the preferred entrance point. In that sense, the CBN’s decision to launch the e-Naira must be viewed as the Nigerian government’s entry into the world of virtual money. International economies have started to switch from paper money to digital currency as a result of this quick technological development and expansion of the financial industry, and Nigerian economies have followed suit.


Abdulkareem M. (2021) claims that central banks all over the world have been carefully developing their digital currencies by gradually weaning themselves off of rapidly declining cash payments. The Central Bank of Nigeria joined the fray in order to ensure that Nigeria is not left behind, which led to the launch of her e-Naira, which comes after instructing banks to close cryptocurrencies and ban crypto-related accounts in February 2021. ( It is necessary to assess the effects on payment system efficiency as well as any potential risks related to the operation of these systems. Digital currencies could therefore have a greater impact on other central bank responsibilities, such as payment system oversight and regulation, financial stability and monetary policy, as well as associated fraud and money laundering tendencies, posing a relatively high risk to general users if they are widely used for high-value transactions or other asset types other than funds transfers.


1.2 A description of the issue


The paper naira in Nigeria experienced a major foreign exchange crisis prior to the introduction of the electronic naira, and the rate at which it was depreciating caused significant concern among the populace, requiring the testing of an alternative form of legal money. Additionally, as stated by the CBN earlier this year, 2021, prohibits cryptocurrency, making the switch from paper to electronic currency necessary.


Since the publication of the e-Naira guidelines in Nigeria, Adolphus (2021) observed, some worried voices have raised their worries that the e-Naira is comparable to what people are used to and hence is not required. This is due to Nigeria’s rising rate of cybercrime. The vast volume of financial transactions that take place every day, he continued, makes security in financial transactions on these platforms a risk that has aroused public discussion and concern. Online gambling, financial crime, web jacking, cyber defamation, virus/warm, email spoofing, data tampering, and other criminal activities are just a few of the recent criminal activities that cyber thieves have become more adept at and cooperative with. This is especially true when they have access to a person’s identity and wallet using digital currency. The typical Nigerian is therefore leery of this new development on the recently launched e-Naira.


According to Emmanuel O. (2021), numerous arguments have been put forth as to why central banks should think about creating their own digital currency. These arguments include reducing the cost of managing paper money, utilizing newly emerging digital technologies, enhancing the state of the digital readiness landscape, maturing identification registries, promoting financial inclusion, streamlining tax and revenue administration, and more. Despite the thorough precautions the CBN would take in its capacity as the host and curator of the country’s financial services ecosystem, it is important to weigh the risks of this endeavor. This, according to Kalu (2021), is because digital wallets by their very nature increase systemic fraud risk because of the velocity of money and transactions. If significant failures arising from a mass-market financial services system, which the CBDC is positioning to become, have spillover effects, this can have a significant impact on the entire financial services ecosystem. Following this requirement, there has been considerable public interest in the e-Naira regulations’ anticipated launch. The Nigerian people are particularly concerned about the possibility of successfully enforcing the regulations in a way that would most profitably influence the public interest while avoiding avoidable hazards. Furthermore, because these transactions don’t involve the actual exchange of currency but rather rely on computers, which the majority of Nigerians are still inexperienced with, the exposure to people who aren’t digitally compliant is still high. As a result, many analysts are concerned about the challenges and opportunities of this new development if the e-Naira is accepted as a legal tender. As a result, the goal of this study is to examine the issue and future of the e-Naira in Nigeria.


1.3 The purpose of the study


This study’s overarching goal is to investigate the issue and future of the e-Naira in Nigeria. In particular, the study aims to:


1. Determine the economic benefits of the e-naira launch for Nigeria.


2. Examine whether the public has any misgivings about the eNaira Innovation.


3. Identify the obstacles that could prevent this innovative invention from being accepted.


1.4 Questions for Research


The following inquiries serve as a guide for the research:


What are the advantages of the launch of the e-naira for the Nigerian economy?


2. Has the public expressed any mistrust about the eNaira Innovation?


3. What difficulties might prevent the adoption of this eNaira invention?


4. What suggestions might be made to secure eNaira uptake and public acceptance?


1.5 Importance of the research


The study’s conclusions will be useful to policymakers, the government, and the general public. The study’s findings will shed light on the necessity for the government, policy makers, and economic developers to invest more in this new invention in order to help the general public understand e-Naira and allay their worries and fears regarding its use. The study’s findings will help other economic sectors that this new development will have an impact on prepare for the issues that will come with the launch of the e-Naira and find a method to downplay it so they can continue to be relevant in the evolving business environment. The study’s findings will, in the end, contribute to the body of literature and be used as a tool for academics and students who seek to pursue additional research in a related topic.


1.6 Study’s range of inquiry


4. Examining the issue and future of the e-Naira in Nigeria is the study’s main goal. The study will further explore any public mistrust of the e-Naira Innovation and make recommendations for how to promote widespread use. Aba Commercial Town in Abia State is the only place the study is restricted to.


1.7 The study’s limitations


While conducting the study, the researchers ran into some minor obstacles, just as in every human endeavor. The researcher had to choose from a small number of sample sizes because there was a limited amount of literature available on the topic because it is a new discourse. As a result, the researcher had to spend more money and time looking for the necessary materials, literature, or information as well as conducting the data collection. The researcher will also work on other scholarly projects while conducting this study. However, despite the limitations, all of these limitations were minimized to provide the best.


1.8 Definition of key words


Digital currencies serve the same roles as traditional currencies, such as serving as a unit of account, a store of value, and a medium of exchange, but they exist solely as electronic data.


The first suggested digital currency by the CBN is called eNaira. The Central Bank of Nigeria has created the legal tender central bank digital currency (CBDC) known as the eNaira. The Naira can be used much like cash in its digital version.

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