The Central Bank of Nigeria is sweetening its deal and encouraging people and local businesses to use the e-naira, its central bank digital currency (CBDC). The monetary authority has reduced transaction fees for the e-naira platform by half in a bid to increase the transaction volume on the platform.
In a move aimed at promoting the use and adoption of the e-naira central bank digital currency, the Central Bank of Nigeria (CBN) has reduced service fees by 50 percent, according to Bitcoin.com.
The CBN also highlighted the benefits of adopting the CBDC as local businesses signing on to become e-naira merchants can potentially increase the volume of their e-commerce transactions by 50 percent based on previous research.
Kingsley Obiora, the deputy governor of the Central Bank of Nigeria, said that adopting the CBDC could help Nigerian businesses improve cash management. Embracing the e-naira could also help increase the country’s cross-border trade volumes significantly.
“Also, the implementation of cross-border transactions in phase 3 of the e-naira project is expected to increase cross-border trade by about 30%,” Obiora said. “Furthermore, the lower transaction cost is expected to increase the usage (transaction volume and value) of eNaira and improve income generation by businesses.”
Obiora made his comments just days after CBN Governor Godwin Emefiele said that number of users of its CBDC is less than a million. However, the central bank is now targeting to increase the number of e-naira users by tenfold.
One way to achieve this goal is to add a feature that allows people without bank accounts or smartphones to still access the CBDC. The central bank has unveiled an unstructured supplementary service data (USSD) code which the monetary authority says will improve financial inclusion.
Globally, Nigeria is ranked fourth in terms of the number of cryptocurrency owners with 22 million people owning some type of digital currency. It is the top African country in terms of crypto ownership and is home to more than a third of the continent’s crypto users.