Why was the Nigeria CBDC a failure?.

[Felicity_Tide]

Recently, I've been intrigued to practically understand the state of cryptocurrency in Nigeria from the legal point of view. While carrying out my research, I remembered that Nigeria once had its own Central Bank Digital Currency (CBDC), popularly known as eNaira. I want to guess that a few persons on this board have made use of it, while others don't even know how its interface looks.

What led to its introduction?
From what I gathered, as cryptocurrency started becoming popular, countries around the globe saw the need to introduce their own digital currency that would be backed by a central bank. Nigeria happens to be the 1st country in Africa to launch its own digital currency. It was quite the opposite of the Naira (note), but was its equivalent (1 eNaira ≈ 1 Naira).

Why was it a failure?
As reported and I confirmed, the eNaira wallet is no longer available on the Google Play Store, which proves that its adoption rate was quite poor and didn't meet up to the CBN's expectation. Though it was reported that there were too many poor reviews.

I want to believe Its failure was probably as a result of the CBN failing to identify the place of eNaira in the cryptocurrency ecosystem in general. It actually shares similar properties with stablecoin, but its usage wasn't fully associated with cryptocurrencies in general.
Their(CBN's) idea of people leaving speculative and volatile currencies just to adopt another digital currency that has similar properties to the naira, with zero volatility, was the endgame of the project from the onset.

And in 2020, the year before it was introduced, Nigeria was one of the top leading countries in the Cryptocurrency race. I came across some speculations that the government's intention was to limit cryptocurrency usage while introducing the eNaira to take over, which I think you can find in either the news or video link shared below.

These are clearly my own opinions, but what do you think went wrong from your point of view?.

Source - https://youtu.be/ez3O50nLshY?si=o7yB-czC-wty8mCI
Cable News

[Charles-Tim]

No coin or asset in the world has zero volatility. It is pegged to naira price and naira does not have zero volatility. Although what you mean is understandable as it is compared with bitcoin and other cryptocurrencies which are far more volatile.

Emiefele which was the former CBN govern is the reason. Yes, it is true that the man is hostile to cryptocurrencies and at the same time, push for eNaira. The youths did not like that and avoid eNaira, but that is not just only the reason.

ENaira speed wallet was full of bugs when it was launched. That also discouraged people.

Also Opay, Palmpay, Kudo and other means people make free transactions is already existing. People even see Opay to be very reliable. You can make 3 transactions on Opay and Palmpay daily with zero transaction fee while 25 transactions are free on Kuda monthly. ENaira speed wallet has charges.

At the start, if you want to use it, you have to connect with you commerical bank to fund the wallet, that alone can discourage people by saying you will still send money from your bank to it. So while using it.

As the CBN was hostile to cryptocurrencies and banned it, people do all means possible to avoid CBN and yes definitely they avoid their CBDC.

I have zero smerit left, I will send later.

[Felicity_Tide]

~snip

Thanks for the clarity, but assuming the CBN governor made the eNaira more flexible with cryptocurrency and allowed cryptocurrency to thrive without being hostile to them, do you think it would have gained better adoption in today's world?, because with the strong adoption of cryptocurrency today in Nigeria, I believe there would have been a chance for it, and it would have had its own importance.

[EluguHcman]

No coin or asset in the world has zero volatility. It is pegged to naira price and naira does not have zero volatility. Although what you mean is understandable as it is compared with bitcoin and other cryptocurrencies which are far more volatile.

Certainly, because the Naira or the fiats in general does not portray the volume of volatility like the Cryptocurrencies does not mean it is a zero volatile.
They are still being influenced by the volume of economic fluctuations either by local or international intercourse, inflations and
are also politically manipulated such in a geopolitical crisis.

The naira is not globally admired because it can not maintain substantial values which can be hold for reserve such as the Euro and the USD.
And worse to it, the eNaira could not made a successful to dominate or recognized is because it does not have potential value different from the physical #.

Other side effect that crippled the eNaira was that the CBN failure to limit the volume of printing the physical # so, there was no regulatory index that was to advice or drive users attentions to use the electronic # when the physical #  will not be circulated and reachable as usual.
Scarcity of the Physical # would had given an edge for the eNaira recognition or massive adoption m

[Charles-Tim]

Thanks for the clarity, but assuming the CBN governor made the eNaira more flexible with cryptocurrency and allowed cryptocurrency to thrive without being hostile to them, do you think it would have gained better adoption in today's world?, because with the strong adoption of cryptocurrency today in Nigeria, I believe there would have been a chance for it, and it would have had its own importance.

People that can adopt it fast are the naira/crypto P2P people that are using Opay, Palmpay which have some free transactions daily. They like these apps because they are very reliable in a way they may not consider other apps like the eNaira speed wallet.

I do not know the reason CBN did not first make the payment on the Speed wallet to be free for some years or copy Opay but make it like 5 or more daily transactions free.

But I am not sure if people will adopt it, we can only just make speculation about it.  But in my opinion, I do not think people will leave Opay and others for such a wallet, but a survey might help to further know the reason people did not use it.

[BtcAnalyst1]

~snip

Thanks for the clarity, but assuming the CBN governor made the eNaira more flexible with cryptocurrency and allowed cryptocurrency to thrive without being hostile to them, do you think it would have gained better adoption in today's world?, because with the strong adoption of cryptocurrency today in Nigeria, I believe there would have been a chance for it, and it would have had its own importance.

The Nigerian central bank where in a haste to copy country like China unfortunately, China is still strangling with her CBC, while it is obvious that Nigeria's CBN lead Emefuele, the former CBN governor has no experience on how to go about CBC, the whole ideas behind the CBDC was to create a centralized Fiat systems that will complete with crypto, especially the the centralized crypto stable coins. As a matter of fact, the idea could not work and crypto users are wiser than the governments.
Again, in as much as the US, never supported CBDC, it will never stand the test of time, and a critical look at certain developments, whether economic policies, politics etc has it beginning in the US and the rest of the world look up in the direction in my opinion.

[Richbased]

The naira is not globally admired because it can not maintain substantial values which can be hold for reserve such as the Euro and the USD.

I think you are referring to the eNaira here but how do you think it will be globally admired when it is not a global reserve currency. It can only be admired by the citizens of Nigeria but yet it's not still easy for many people because there will sure be some manipulation in the system and it will still be under the custody of the government (centralized) and Nigerians are trying to move away from keeping their money under the watch of the government hence people will surely not buy the idea of the eNaira.

And worse to it, the eNaira could not made a successful to dominate or recognized is because it does not have potential value different from the physical #.

It has same value as the Naira and it's still centralized so i don't even know the kind of funny game the CBN wanted to play  by introducing the eNaira and call it CBDC, very funny people.

[Gozie51]

Just as we know, most of the countries have not had a smooth CBDC transition unlike China, US I think halt all retail CBDC through the expective executive order by Trump.

However for me, I wasn't anticipating the success of e-naira because they were not ready for it and of course it all was messed up from the beginning. They say when the head is bad, all the body has the tendency of also being bad.

The point is the head of Nigerian government (Buhari) at that time wasn't looking at anything digital, we could see that from the hate on cryptocurrency. So whatever effort made by Isa Ali Pantami, the minister of technology and digital economy at that time was a waste of time.

The major reason for its failure were:

1. The banks who were already comfortable with their digital operations and charges, they were collecting through apps, so they saw it as a competition.

2.  Micro finance banks were also given licence to operate and they were getting the hearts of customers.

3. The masses didn't see reason for it apart from the bad technology, they are already use to stable coins and cryptocurrency at large.

[Pablo-wood]

There was no structure on ground to push the e-Naira to the public. Nigerian's didn't see the need for a central bank digital currency when the local currency is in serious decline. If Nigerians were compelled maybe the adoption amongst citizens would have been massive. We know we Nigerians we only believe a system when it begins to function but in the testing face many people will either talk down on it or discourage people from it.

[Curious T]

From the first day I heard about the creation of the coin, it was obvious it would be a huge failure. I guess some people just stayed somewhere and figured out a way to launch a project where they will use to get money off the budget for themselves, because I see no reason Nigeria should have a coin at that time.
First of all, the country was and probably still against crypto, so why should people use your coin when you don't fully embrace crypto or bitcoin? They fess about accounts that made transactions labeled with anything related to crypto, yet they created a cryptocurrency. How does that make sense?

Secondly, nobody trusts the Nigerian government. The seriously cant expect people, which majority are youths to use their coin.
Finally, the coin is backed to the naira. I mean, that alone can hinder the success of the coin. Who wants a coin that is worth nothing and will always be worth nothing? There is a higher chance of the coin losing value that gaining value. The project was doomed from the very beginning and I think they knew that.

[Cryptomultiplier]

There was no structure on ground to push the e-Naira to the public. Nigerian's didn't see the need for a central bank digital currency when the local currency is in serious decline. If Nigerians were compelled maybe the adoption amongst citizens would have been massive. We know we Nigerians we only believe a system when it begins to function but in the testing face many people will either talk down on it or discourage people from it.

On a contrary, I believe the CBDC hasn't failed. It is rather unused or exploited for the reasons it was created. As right said, Nigerians aren't interested in such a structure when the economy of the country is getting worse everyday.
We may fall back to using cryptocurrency at some point, but the CBDC may be used by a different government in power who has implemented the use of cryptocurrency in the country and has built in infrastructure to enable seamless transactions using cryptocurrency.

[Fivestar4everMVP]

Why was it a failure?
As reported and I confirmed, the eNaira wallet is no longer available on the Google Play Store, which proves that its adoption rate was quite poor and didn't meet up to the CBN's expectation. Though it was reported that there were too many poor reviews.

I want to believe Its failure was probably as a result of the CBN failing to identify the place of eNaira in the cryptocurrency ecosystem in general. It actually shares similar properties with stablecoin, but its usage wasn't fully associated with cryptocurrencies in general.
Their(CBN's) idea of people leaving speculative and volatile currencies just to adopt another digital currency that has similar properties to the naira, with zero volatility, was the endgame of the project from the onset.

And in 2020, the year before it was introduced, Nigeria was one of the top leading countries in the Cryptocurrency race. I came across some speculations that the government's intention was to limit cryptocurrency usage while introducing the eNaira to take over, which I think you can find in either the news or video link shared below.

These are clearly my own opinions, but what do you think went wrong from your point of view?.

Your point and reason why you the eNaira turned into a failure is very valid, but I also other reasons why the project failed, I have two reasons actually, and the first reason is...

1. The eNaira wasn't blockchain based: yeah, the eNaira as a digital version of the naira and a suppose better alternative to cryptocurrencies according to the government wasn't developed on the blockchain, the CBN simply built an app which they referred to as the eNaira wallet, and had the power to add and remove figures from thin air and as it pleases them, this figures was the eNaira token, Nigerians having had a good experience with cryptocurrencies weren't daft to believe in such a system, this is one reason why many completely ignored the use of eNaira.

2. Every one in the country were angry with the government at the time due to forced cashless policy which they implemented immediately without preparation or warning: the then CBN governor, emiefele working hand in hand with the then president, buhari forced Nigerians into cashless policy which no one was prepared for, many families were thrown into unexpected financial difficulties due to lack of cash, people were angry and that made them ignore the eNaira, some as a way to get back at the government proceeded to app stores to give the eNaira wallet negative ratings and reviews, all this contributed to the failure of the project.

[EarnOnVictor]

My first question: What is not a failure in Nigeria's creations and systems? So long as they didn't wait for a better country to start it so that they can copy their ways of doing it, there is a high possibility that it will fail in Nigeria.

My second question: Have you thought about why the US has been so careful in creating its CBDC despite making it popular? It's because they are careful that it doesn't affect the present financial companies, or financial companies kill it on arrival with an overhaul and better service.