eNaira is ‘crippled‘: Nigeria in talks with NY-based company for revamp

After multiple attempts to create an efficient digital currency, the Central Bank of Nigeria is turning to a New York tech firm to revamp the underlying technology.

The Central Bank of Nigeria (CBN) continues to develop its central bank digital currency (CBDC), the eNaira, but this time it’s calling for backup.

According to a Feb. 21 Bloomberg report, the CBN is in talks with new “technology partners” to develop a new and improved system to manage the eNaira.

According to sources close to the matter, the Nigerian financial authority has discussed these plans with the New York-based technology firm R3.

New software for the eNaria will be created to allow the CBN to have complete control over the initiative; however, the unnamed source said the matter is confidential.

The effort to create the eNaira began in 2021 with the help of the financial software company, Bitt. According to the report, the new partner won’t immediately take Bitt’s role but will help phase in total control for the Nigerian central bank.

In a statement, Bitt said it is aware that the CBN works with various partners for its technological innovations. It confirmed that it still works closely with the CBN and is “currently developing additional features and enhancements.”

Related: Nigerian crypto exchange Roqqu receives European virtual currency license

Although it is one of the first countries to have launched a CBDC, Nigeria’s eNaira got off to a sluggish start, with low adoption. According to some reports, the ambitious project is “crippled,“ with only 0.5% of Nigerians using the CBDC.

In January, a Nigerian innovator launched the country’s first active Bitcoin Lightning node. Shortly before that, the government announced its plan to create a legal framework for stablecoins and Initial coin offerings.

Nigeria is one of more than 90 countries exploring the use of CBDCs. Others include Russia and Japan, both of which have plans to roll out their currencies before the summer. The city of San Francisco is also looking into the possibility of developing a CBDC system.

However, there is active pushback against CBDCs from activists who call them “surveillance” tools.