e-Naira Hits New Record After CBN Introduced Enhanced USSD Service Channel
- The adoption of e-Naira rose by 302% in nine months to reach N10.26 billion by the end of September 2023
- Sources in the CBN said transactions made through USSD fueled the spike in eNaira use in the country
- A report stated that e-Naira disbursements for diaspora remittances are still in the experimental program
- An investment research associate at Commercio Partners told Legit.ng that the e-Naira has the potential to become more popular in the future
Legit.ng journalist Zainab Iwayemi has over three years of experience covering the Economy, Technology, and Capital Market.
The Central Bank of Nigeria's digital currency, the e-Naira, saw a 302% growth in value in circulation in just nine months, reaching N10.26 billion by the end of September 2023.
Source: Getty Images
According to a Vanguard report, the rise in adoption was fueled by USSD channel transactions.
The e-Naira, introduced by the CBN in October 2021, is the naira's digital equivalent and is utilised similarly to paper money (cash).
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e-Naira adoption continues to rise
Analysis of CBN data on currency in circulation from the CBN's quarterly statistical bulletin showed that the value of the e-Naira in circulation increased sharply by 302% in just nine months, from N2.55 billion at the end of 2022 to N10.26 billion at the end of September 30, 2023.
The growth is 131 percentage points greater than the 171% increase noted during the same time in 2022.
Further investigation revealed that the amount of e-Naira in circulation increased quarterly in Q1, Q2, and Q3, respectively, by 90%, 48%, and 43% last year.
Why adoption increases
The increase in the value of e-Naira in circulation is the result of the CBN's extra steps to encourage the banking public's acceptance and usage.
According to the report, one of these is the launch of the enhanced USSD service channel, aimed at feature phone users and enabling Nigerians to execute transactions and open an e-Naira wallet by only dialling *997# from their mobile phones.
In addition, the CBN debuted the e-Naira in June 2022 as a payout choice for remittances from the diaspora recipients.
Sources close to the apex bank claim that transactions made through USSD channels were the main factor for the spike in e-Naira use.
The amount and value of e-Naira transactions made over the USSD channel increased YoY in 9 months of 23 by 92.95% and 120.93%, respectively, while the number of merchants accepting e-Naira increased by 11.97% during the same time frame.
It was also discovered that e-Naira payouts for remittances from the diaspora are still in the pilot stage.
Speaking on the recent increased adoption of the e-Naira, Dr Ifeanyi Ubah, an investment research associate at Commercio Partners, stated that people are always looking for easier payment platforms.
He told Legit.ng that the e-Naira has the potential to become more popular only if the CBN take the right steps to attract more users with enticing features.
He said:
To foster greater interest and adoption among Nigerians, the CBN must prioritize creating an appealing payment system, providing opportunities for interest accrual, and minimizing transaction costs.
CBN asks FG to use e-Naira to transfer N368.8 billion
Legit.ng reported that the CBN had pitched the e-Naira to the federal government as the best alternative for sharing $800 million, about N368.8 billion, in its National Social Safety Net Programme Scale Up.
The pitch by the CBN is an effort to drive and strengthen its cashless policy.
The pitch was contained in CBN's National Fintech Strategy document.
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Source: Legit.ng
