According to ZeroHedge daily, the CBDC experiment in Nigeria appears to have failed, as the Central Bank of Nigeria's (CBN) efforts to replace cash with the eNaira currency has faced a wave of strong opposition from the people. , culminating in many protests breaking out.

CBDC trial in Nigeria

Nigeria's recent experiment with the eNaira coin - issued on the Hyperledger Fabric blockchain platform - has brought many valuable experiences and cautionary lessons. Nigeria's efforts to apply CBDC have encountered many obstacles leading to a wave of protests from the people and are considered a failed experiment.

After the initial pilot implementation in October 2021 with many incentives, Nigerians are still hesitant to accept eNaira. By October 2022, less than 0.5% of the Nigerian population accepted the use of the new digital currency.

The Central Bank of Nigeria (CBN) then continued to take strong measures by banning the circulation of banknotes after January 31, 2023. This move forced people to reluctantly convert their cash holdings to eNaira.

Not stopping yet, the CBN sent a letter to all banking institutions in the country in December 2022, requesting to implement a ban on cash withdrawals for both individuals and businesses, causing 90% of the population to use Cash had no choice but to comply with the conversion to eNaira.

The cash withdrawal limit is ₦100,000 (225 USD) per week for individuals and ₦500,000 (1,123 USD) for businesses. Citizens who want to withdraw larger amounts are subject to a transaction fee of 5% to 10%. ATMs are also limited to ₦20,000 (45 USD) per day, and only ₦200 (0.45 USD) notes or lower denominations are available in ATMs.

Implications and lessons from Nigeria

While the Nigerian Government sees the launch of eNaira as a new step forward, people here oppose the shift to a cashless society. The short-term cash bans not only reduced the amount of cash in circulation from 3.2 trillion Nairas to 1 trillion Nairas, but also destabilized a society deeply dependent on cash in daily transactions. The Nigerian government's tough approach has created a public outcry, as well as reduced confidence in the new financial system.

The eNaira trial has provided important lessons for countries considering CBDC adoption. The above corollary also shows that public trust plays an important role in the success of CBDC, and governments need to adopt a more flexible and friendly approach.

In addition, Nigeria's experiment also raises questions around the viability, benefits and limitations of forced adoption of CBDC. Now, the discussion around CBDC is not just about the technology or potential effectiveness, but also about the actual experience and interest of the public, because they are the main ones affected by its implementation. perform any conversions.