In September last year, The Central Bank of Nigeria (CBN) partnered with Barbadian fintech firm Bitt to develop the country’s new digital currency, eNaira. This development made Nigeria the first African country to introduce a digital currency. This also opened up the discussions around Central Bank Digital Currency (CBDC), which industry leaders described as the future of money. In Kenya, the Central Bank has invited the public for views on the potential introduction of a digital currency.
The Atlantic Council describes CBDC as a digital form of a country’s fiat currency that is also a claim on the central bank.” Instead of printing money, the central bank issues electronic coins or accounts backed by the full faith and credit of the government.” it says. CBDC is issued and regulated by the Central Bank, which is the discussion we dived deep into in our last episode of the Crypto in Afrika Podcast.
In the podcast, Nixon Kanali, TechTrends Media tech editor, hosted Binance Africa head of Business Development and partnerships Brenton Naicker and crypto-journalist for Blockchain.News, Brian Njuguna. “We have seen a lot of interest around CBDs being sparked around Africa over the last couple of years. The African economy is so hot on CBDCs right now,” Brenton says.
Why do we need CBDCs? According to Brian, this currency will drive financial inclusion, especially for the unbanked population. “Going the digital way is going to propel more economic prosperity across the different African countries”, he says. At the launch of the e-Naira in October 2021, the Central Bank of Nigeria governor, Godwin Emefiele, said 500 million eNaira ($1.21 million) had already been minted. Eighty-seven countries (representing over 90 percent of global GDP) are exploring a CBDC. In May 2020, only 35 countries were considering a CBDC. Nine countries have now fully launched a digital currency, with Nigeria being the latest country to launch a CBDC, the e-Naira. You can listen to more insights on the Podcast on CBDs in Africa below.