Same Naira, More Possibilities! Assessing the Legal Status of the eNaira and Its Potential for Privacy and Inclusion

Abstract

On 25 October 2021, Nigeria became the second country in the world, and the first in Africa, to launch a central bank digital currency. Launched with the tag line “Same Naira. More possibilities”, the Central Bank of Nigeria publicized the eNaira as having the capability to deepen financial inclusion, reduce the cost of financial transactions and support a more efficient payment system. However, more than one year after its launch, its usage is yet to gain a critical mass. This article identifies the significant challenges that make the eNaira unacceptable and potentially ineffective. First, its status as legal tender is questionable; secondly, it undermines privacy, a critical component of physical cash. Thirdly, it is incapable of wide acceptance by individuals and entities across Nigeria. The article explains each of these challenges and proposes a roadmap to the eNaira's acceptance and effectiveness.