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Africa’s largest economy embraces a digital currency that has a peculiar backstory.
Julian is a staff writer at CNET. He’s covered a range of topics, such as tech, travel, sports and commerce. His past work has appeared at print and online publications, including New Mexico Magazine, TV Guide, Mental Floss and NextAdvisor with TIME. On his days off, you can find him at Isotopes Park in Albuquerque watching the ballgame.
Nigeria’s Central Bank launched a digital currency on Monday that is designed to be used alongside its physical currency. The release of eNaira was officially announced via a press release issued by the Central Bank of Nigeria.
A central bank digital currency is a type of cryptocurrency that’s controlled by a country’s central bank. More than 100 countries, including the US and China, are exploring the development of a CBDC, according to the IMF.
The first CBDC to launch in Africa, eNaira was developed by Bitt, a Barbados-based fintech company that also developed a CBDC called DCash for the Eastern Caribbean Central Bank earlier this year. Medici Ventures, a venture fund initially formed as a subsidiary of Overstock.com, purchased a controlling interest in Bitt. Medici Ventures is now part of a limited partnership controlled by Overstock.com and Pelion Venture Partners, a venture capital firm.
“Overstock has always focused on developing and growing new and emerging technologies,” Overstock CEO Jonathan Johnson said in a statement to CNET. “In 1999, that emerging technology was the internet and e-commerce. Several years ago, we formed Medici Ventures as a subsidiary to focus on another emerging and world-changing technology — blockchain.”
Overstock.com, an online store that sells furniture and home appliances, became the first major retailer to accept Bitcoin payments worldwide in 2014. Overstock’s interest in crypto has persisted, with its subsidiary investing in more than 20 blockchain startups since then. According to Johnson, there is “no direct connection” between Bitt’s business and Overstock’s core e-commerce business.
Nigeria’s economy is the largest in Africa, with an annual GDP of roughly $432 billion. In 2020, the country’s economy contracted due a COVID-19-driven increase in unemployment and reduced demand for exports. Though economic conditions have improved, more than a third of Nigerian adults were unbanked in 2020.
The new digital currency could potentially expand economic opportunities for Nigerians, giving them access to accessible via smartphone. Two digital wallets that support eNaira launched on Monday as well. Those wallets, the eNaira speed wallet and eNaira merchant wallet, are now available for download from the Google Play store and Apple Store.
On Monday, President Muhammadu Buhari said eNaira — and the blockchain technology underpinning it — have the ability to grow Nigeria’s GDP by $29 billion over the next decade. Still, his country’s embrace of the new technology has been limited and highly controlled. In February, 2021, the Central Bank of Nigeria barred the nation’s banks and financial institutions from using cryptocurrency. Despite the ban, cryptocurrencies remain popular in Nigeria, seen as a way to protect against volatility and conduct commercial transactions.
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