Nigeria on Monday became the first African nation to launch a digital currency, the eNaira, which the Central Bank of Nigeria says is a "major step forward in the evolution of money in Africa’s most populous country.

President Muhammadu Buhari said the digital currency and the blockchain technology it uses can foster economic growth and increase the GDP of Nigeria's economy, one of Africa’s biggest, by USD 29 billion over the next 10 years.

Central Bank Governor Godwin Emefiele said that there had been an "overwhelming interest and encouraging response", adding that 33 banks, 2,000 customers and 120 merchants had already registered successfully with the platform, which is available via an app on Apple and Android.

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The central bank also hopes the digital currency will encourage financial inclusion in the country of more than 200 million people. Only 45 percent of Nigeria’s 106 million adults have bank accounts as of 2020, according to the Lagos-based Enhancing Financial Innovation & Access, a financial sector development organization.

But experts and cryptocurrency users in the continent's biggest economy say the fact that there are more questions than answers regarding the eNaira, and a large amount of worry over the consistency of Central Bank (CBN) rules, means the government faces a tough path to make the eNaira a success.

"It's not clear looking at the CBN's body of work that Nigerians would be comfortable using this," said Ikemesit Effiong, head of research with Lagos-based consultancy SBM Intelligence.

He added that the CBN had not yet made clear whether users could transfer eNaira back into traditional naira, whether they could use cryptocurrency to buy or sell the eNaira or even whether there would be physical locations to use and transfer eNaira, or whether it would be entirely digital.

"There are more questions than answers, even though we are looking at the launch of this digital currency. The fact that this is the case so late in the game is concerning," he told Reuters.

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For 28-year-old Ebuka Joseph, an art dealer and enthusiastic cryptocurrency user in the commercial capital, Lagos, the uncertainty means he will stay on the sidelines, for now. His concerns centre on whether he would easily be able to change eNaira back into normal currency.

"I have had issues trusting the central bank ... because they have already banned crypto," he told Reuters. "I want to hear from people, see people use it before I venture into it."

Nigeria ranked seventh in the 2021 Global Crypto Adoption Index compiled by research firm Chainalysis.

(With inputs from agency)

(Edited by : Priyanka Deshpande)

First Published:Oct 27, 2021 4:54 PM IST