Nigeria’s crypto ban has reached its highest level globally, but Enyra’s adoption has stalled.

In the year The Central Bank of Nigeria's 2021 ban on regulated financial institutions from operating crypto exchanges has severely hampered the adoption of the naira's Central Bank Digital Currency (CBCC), according to Chinedu Albert, a Nigerian technology and innovation lawyer.

In an interview with Cointelegraph, Albert said Nigeria's CBCC is still a lofty idea representing the government's response to an “ill-advised” blanket ban on cryptocurrencies and other digital assets.

In the year By 2021, Chinalysis has ranked Nigeria at the top of the Global Crypto Adoption Index, reflecting the demand for funds unaffected by government policies and inflation, characteristics offered by some cryptocurrencies. However, Albert explained that eNaira faces low adoption because it lacks an element of hedging, an important quality of cryptocurrencies.

In the year A 2022 survey by crypto exchange KuCoin highlighted that many Nigerians have started using cryptocurrencies as an alternative to store and transfer assets. According to local media reports, the country's fiat currency, the Nigerian Naira, was It lost 23% of its value in the third quarter of 2023. This price loss is a key driver for local investors to look at declining assets like Bitcoin (BTC).

Albert emphasized that Nigerians do not trust NARA or the central body that controls it. He said the adoption of the naira will only happen when the government gains the trust of Nigerians and the naira reaches a more reliable level.

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Inaira, Africa's first CBCC, was released on October 25, 2021 and is open to everyone to trade. A May 2023 International Monetary Fund report indicated about 14,000 weekly Einaira transactions, which is only 1.5% of total wallet transactions. This indicates that 98.5% of wallets are not used every week, indicating “disappointingly low adoption”.

Despite the lifting of the ban on digital assets for Nigerian banks and financial institutions on December 23, the CBN and INAIRA still have a credibility gap to overcome. Things like crypto banning, closing of crypto-linked bank accounts, forex scams and the recent rescheduling of the naira have negatively impacted many Nigerians on the central bank and its policies.

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