• The International Monetary Fund (IMF) released a working paper assessing the eNaira CBDC’s first year of performance, finding it “laudable” but with room for improvement.
• It has yet to reach 1% of Nigeria’s population and has struggled to break into the retail market or facilitate remittances.
• The IMF paper suggests that the eNaira could compete with mobile money operators or provide a bridge between them, potentially reshuffling the industry.
Introduction
The International Monetary Fund (IMF) recently released a working paper assessing the performance of Nigeria’s eNaira central bank digital currency (CBDC) for its first year in operation.
Assessment
Overall, IMF researchers found that the eNaira was “laudable” but there was still room for improvement. To date, it has yet to reach 1% of Nigeria’s population and has struggled to break into the retail market or facilitate remittances as intended.
Suggestions
The IMF paper suggests that the eNaira could compete with mobile money operators (MMOs) on the retail market or provide a bridge between them and potentially reshuffle the industry by replacing all of their services. However, this is seen as hard to imagine given current circumstances.
Conclusion
Despite its issues so far, many other countries are taking note and also exploring CBDC options for themselves. South Africa and Ghana are already running pilots while others are in research phase according to reports from IMF’s digital money and fintech blog.
Takeaway
While there is still much work to be done in order to make Nigeria’s eNaira successful, it is clear that other countries around the world have taken note of its potential and are beginning to explore their own CBDC options as well.