Nigeria Changing Its eNAIRA Model To Promote Use of Its CBDC

Let's head off to Nigeria. They are changing the model for their CBD C the E NAIRA to promote, promote more use in an effort to push for broader adoption. The Central Bank of Nigeria has updated their app to enable contact list payments. The bank hadn't responded to a request for more information at press time. A lot going on in Nigeria around the use of this CBD C. I know we've spoken about it a few times on the show. But will, what do you, what do you make of this? Do you think that an update on the app is going to be what it takes to get Nigerians really behind the IAA? It's going to take a little bit longer than that. A little more than that as well. And a lot of people don't realize this, but Nigeria has one of the most vibrant tech sectors in all of Africa and just globally. Uh Jack Dorsey himself got creator of Twitter and also the CEO of B block has long held aspirations to move over to Nigeria and move over to Africa full time. Why? Because there's a lot of people who think just like him over there. And so he wanted to make the move. And so you see that side of things with the tech, on the other side of things, the Nigerian government has this desire to move into the CBD C landscape, whether that's because of incentives on controlling monetary policy or because they want to do something with remittances. Nigeria has a very large Remittance market. It's hard to tell at the basis though. You have to look at like how this is rolling out compared to other countries. It doesn't be moving faster than other countries. I mean, they're talking about changes to their mobile wallet while the US is still debating if we're even going to have the CBD C. Right? So there's two different argument here. And I, I think the one thing that we should like point out is that a lot of people in Nigeria are not going to be able to use this mobile wallet because they're still a cash based economy, especially eastern parts of the country, which are still very far removed away from using a mobile wallet for any sort of payment. Right. There's a cash based economy, maybe even payment in kind. So it's a little, it's weird to look at this, this economy and think of how A CBD C could be fit in here. But there are definitely portions of the economy where this could be a big use case that being said, the volumes and the amount of people using are pretty low. Uh, this article does mention like wallet counts. It's about like 13 million wallets or so are open, uh, in the country. Wallet counts. Not a great metric. Of course. So, because anyone can open a wallet and just make tons of them. So you have a hard time understanding who's assigned to a wallet. It could be one person with 1000 wallets or one person with one wallet. Uh at the end the day, these are still very small numbers. Uh but they're, they're it at the very least, Danny. Yeah. And to get that true growth for uh any CBD C or any e-commerce payment for that matter, Nigeria is going to have to rethink the way that it's basic economy works. There's a huge sector and I think it's in the hundreds of billions of dollars in the informal economy that is cash based. And it's because merchants and vendors in these small time businesses, they're not set up to take anything other than a cash payment and having a CBD C requires two things. It requires you to have the technology to accept it. And also so for you to be interacting with other businesses that make it worth your while to even take this form of money. So in order for this uh really to catch fire in, in Nigeria, the entire economy is going to have to have a lot more uh digital infrastructure put in place whether that's through mobile phone uh proliferation or just through point of sale kiosks. Uh that's going to be the key to even thinking about making this a successful product uh in Nigeria. Yeah, you both mentioned the informal economy and the number for that is the country has a $220 billion informal economy that's mostly run on, on cash. There's little infrastructure built out for use of the, you know, for, for vendors who are incorporated in this $220 billion number when we talk about that economy. So I think that there is definitely a long road head here. Um I, I read the story and I think back to March when we were seeing protests over the in Naira and the protests kind of were twofold. They took in to account this cash shortage. So there's a limit on how much Nigerians or there was a limit. At least, I'm not sure if that's still in place on how much Nigerians could withdraw in cash on a daily basis as they were being pushed towards the in Naira. And then the money was actually being redesigned. So that enhanced the shortfall of cash in the country. When that story came out back in March, it was reported that less than half a percent of Nigerians were using the CBD C. But more than 50% of Nigerians had used crypto before. So that points to a bigger problem for me than just infrastructure, it points to possibly, you know, trust in the government and um financial policy in the country. So I think that there are definitely a lot of roadblocks for Nigeria to overcome. But I do also think that other countries are probably watching what's happening with the watching, how the country rolls out the CBD C uh taking notes and learning for uh CBD C projects in the Western world. Will any final thoughts here? No. Yeah, this is just the country to watch probably with uh in terms of CBD C development. So keep an eye on Nigeria.