The Nigeria Government plans to work with a US firm to rescue the eNaira currency

The government of Nigeria is constantly thinking of new ways to promote the use of the country’s central bank digital currency (CBDC), the eNaira.

Bloomberg reported yesterday that the nation’s Central Bank has been in discussions with new “technology partners” to create a new and improved system to manage the government-backed digital currency.

According to the report, the CBN wants to “develop its own software for the digital currency so that it can keep full control of the effort.” The Nigerian financial body reportedly has held talks with the New York-based tech company R3 about these initiatives.

The government has plans to develop a new software for the eNaira, which of course the Central Bank of Nigeria will have full control over. Details are yet to be disclosed at this time, the anonymous source also confirming that the situation was one of confidentiality.

Bitt, a financial software company, started the process of creating the Nigerian eNaira in August 2021. Nonetheless, Bloomberg claims that R3, the new partner, will not immediately replace Bitt but will instead help the Nigerian central bank gradually assume full control.

In a statement, Bitt confirmed that the company is aware of the CBN’s collaboration with third parties on technological advances. While it does collaborate closely with the CBN, “additional features and enhancements” are still in the works.

The Central Bank of Nigeria (CBN) released the eNaira on October 25, 2021, becoming the first African country to release a CBDC. The launch was notable, though, because it occurred seven months after cryptocurrency transactions were outlawed in Nigeria.

The public’s reception of the eNaira has been largely unimpressive almost 16 months after its much-heralded launch. Innovation Village reported only 700,000 transactions worth $8 billion had been done, one year after it was introduced. To date, there is no data to suggest that there has been a significant increase in popularity in Nigeria.

Only about 0.5 percent of Nigerians are currently using the CBDC, effectively rendering the ambitious project completely irrelevant. This only suggests that Nigerians are not willing to be part of it.

The new partnership with R3, the New York-based technology mentioned above, will help to modernise the underlying technology in order to improve consumers’ perceptions of digital currency.

President Muhammadu Buhari predicted that the eNaira and the blockchain technology it is built on would add $29 billion to Nigeria’s GDP by the end of the decade. The CBN Governor, Godwin Emefiele, announced at the one-year anniversary that the next adoption phase would focus on reaching 8 million people who do not currently have bank accounts.

Even though this update is ostensibly aimed at that end, it won’t be enough to win over Nigerians’ scepticism. Compared to what is already available, the digital currency doesn’t provide much of an advantage. There is no mention of international trade. To add insult to injury, having a single entity in charge of it completely undermines the purpose of blockchain technology.

Further, so-called “blockchain activists,” who view government-backed digital assets as a surveillance tool, are actively fighting back against CBDCs.