Nigeria is currently facing a severe cash shortage, which has been attributed to the central bank's decision to replace older banknotes with larger denominations, coinciding with rising inflation. In response to this issue, Nigeria has implemented an in-house central bank digital currency (CBDC), eNaira, which has seen a surge in adoption. The value of eNaira transactions has increased by 63% to $47.7 million (22 billion naira), with the total number of CBDC wallets growing more than 12 times since October 2022.
This adoption has been further boosted by eNaira payouts in government initiatives and social schemes. To compensate for the decline in circulating cash supply resulting from the demonetization policy, Nigeria has minted over 10 billion nairas in CBDC. CBDCs offer a solution to the challenges posed by the fiat economy, including reducing operating costs and strengthening anti-money laundering initiatives.
The eNaira has emerged as the preferred electronic payment channel for financial inclusion and executing social interventions, as stated by Godwin Emefiele, governor of the Central Bank of Nigeria. In the midst of the cash crunch, Nigerians now have another option for procuring cryptocurrencies. ConsenSys, the parent company of MetaMask, recently announced a new MoonPay integration that allows Nigerians to purchase crypto via bank transfers.
This new feature is now accessible through the MetaMask mobile and Portfolio DApp, streamlining the process of purchasing cryptocurrency in Nigeria and eliminating the need for credit or debit cards. Users can easily and securely buy cryptocurrency through their mobile devices, making it more accessible and user-friendly for individuals in Nigeria.
Overall, the adoption of CBDCs in Nigeria has proven to be a viable solution to the challenges posed by the fiat economy, and the eNaira has emerged as the preferred electronic payment channel. The integration of MoonPay with MetaMask is a significant step forward in the world of digital currency, further making it accessible and user-friendly for individuals in Nigeria. With these advancements, Nigeria is well on its way to achieving financial inclusion and executing social interventions.
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