{"id":55252,"date":"2023-07-26T09:00:47","date_gmt":"2023-07-26T13:00:47","guid":{"rendered":"https:\/\/coinscreed.com\/staging\/?p=55252"},"modified":"2023-07-26T09:00:50","modified_gmt":"2023-07-26T13:00:50","slug":"cbn-revamps-enaira-model-raises-interest-rate","status":"publish","type":"post","link":"https:\/\/coinscreed.com\/staging\/cbn-revamps-enaira-model-raises-interest-rate\/","title":{"rendered":"CBN Revamps eNaira Model, Raises Interest Rate"},"content":{"rendered":"\n

To increase eNaira <\/a>adoption, the Central Bank of Nigeria (CBN) is redesigning it and has\u00a0raised the interest rate from 18.5% to 18.75% to\u00a0fight the\u00a0growing inflation.\u00a0<\/p>\n\n\n\n

\"CBN<\/figure>\n\n\n\n

The eNaira, Nigeria\u2019s CBDC, was launched <\/a>in October 2022 as a digital version of The Naira, Nigeria's national currency. <\/p>\n\n\n\n

The digital currency is meant to facilitate faster, cheaper, and more inclusive payments for Nigerians, especially the unbanked and underbanked population.<\/p>\n\n\n\n

However, the eNaira has faced several challenges in gaining traction among Nigerians. <\/p>\n\n\n\n

Despite having over 13 million eNaira wallets <\/strong>registered between October 2022 and March 2023, the usage rate remains low for a country with a population of nearly 224 million.\r\n \r\n \r\n \r\n <\/g>\r\n \r\n \r\n \r\n <\/clipPath>\r\n <\/defs><\/svg><\/span><\/a><\/strong><\/p>\n\n\n\n

The value of eNaira transactions up to March 2023 was <\/strong>22 billion naira ($48 million),<\/strong> a small figure considering Nigeria\u2019s $220 billion<\/strong> informal economy<\/strong> that largely relies on cash. <\/p>\n\n\n\n

Moreover, the country lacks the necessary infrastructure for widespread eNaira use, with few merchants accepting the digital currency.<\/p>\n\n\n\n

CBN Upgrades eNaira App and Model<\/h3>\n\n\n\n

To address these issues, the CBN has decided to upgrade the eNaira app<\/use><\/svg><\/span><\/a> and model to make it more attractive and user-friendly for Nigerians. <\/p>\n\n\n\n

The CBN<\/a> has not disclosed the specifics of the changes, but it has said that it will enable contactless payments through the app, which could enhance the convenience and security of transactions.<\/p>\n\n\n\n

The CBN has also said that it will modify the eNaira model to encourage more usage of the digital currency. The current model is based on a tiered system, where users have different limits and requirements depending on their verification level. <\/p>\n\n\n\n

The bank may relax some of these restrictions or offer more incentives for users to adopt the eNaira.<\/p>\n\n\n\n

The CBN\u2019s strategy is focused on the low transfer fees as a means to attract Nigerians to use the eNaira, particularly the younger demographic who have shown interest in startups that offer digital financial services. <\/p>\n\n\n\n

However, it seems that Nigerians value other factors more than the cost of transfers, such as convenience, trust, and utility.<\/p>\n\n\n\n

CBN Hikes Interest Rate to Curb Inflation<\/h3>\n\n\n\n

In another significant development, the CBN\u2019s Monetary Policy Committee (MPC) also increased the Monetary Policy Rate (MPR), which measures the interest rate from 18.5%<\/strong> to 18.75%.<\/strong> <\/p>\n\n\n\n

This decision, announced by Acting CBN Governor Folashodun Shonubi, marks the first MPC meeting and decision since President Bola Tinubu took office on May 29, 2023.<\/p>\n\n\n\n

\n

#CBNMPC<\/use><\/svg><\/span><\/a> CBN Acting Governor, Folashodun Shonubi, maintains that the decision by the CBN MPC to increase Monetary Policy Rate (MPR) has made a huge difference by moderating\u00a0inflation pic.twitter.com\/9iCooBs3et<\/use><\/svg><\/span><\/a><\/p>— Central Bank of Nigeria (@cenbank) July 26, 2023<\/use><\/svg><\/span><\/a><\/blockquote>

The CBN has been raising the interest rate since November 2022 to curb inflation, despite Tinubu\u2019s campaign promise<\/use><\/svg><\/span><\/a> to reduce interest rates. <\/p>\n\n\n\n

The hike in the MPR comes as Nigeria grapples with rising inflation, which erodes the purchasing power of Nigerians and affects their living standards.<\/p>\n\n\n\n

According to the National Bureau of Statistics (NBS), Nigeria\u2019s headline inflation rate rose from 22.44%<\/strong> in May to 22.79%<\/strong> in June 2023. This figure is 4.19%<\/strong> higher than the rate recorded in June 2022, underscoring the country\u2019s ongoing economic challenges.<\/p>\n\n\n\n

\"CBN<\/figure>\n\n\n\n

The CBN\u2019s recent decisions reflect the challenges facing Nigeria\u2019s economy and the efforts to promote the use of eNaira as a digital alternative to cash.<\/p>\n","protected":false},"excerpt":{"rendered":"

To increase eNaira adoption, the Central Bank of Nigeria (CBN) is redesigning it and has\u00a0raised the interest rate from 18.5% to 18.75% to\u00a0fight the\u00a0growing inflation.\u00a0 The eNaira, Nigeria\u2019s CBDC, was launched in October 2022 as a digital version of The Naira, Nigeria’s national currency. The digital currency is meant to facilitate faster, cheaper, and more […]<\/p>\n","protected":false},"author":44,"featured_media":55254,"comment_status":"closed","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"_jetpack_memberships_contains_paid_content":false,"footnotes":""},"categories":[21],"tags":[4136,4137,12234,350],"class_list":["post-55252","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-news","tag-cbn","tag-enaira","tag-interest-rates","tag-nigeria"],"jetpack_featured_media_url":"https:\/\/coinscreed.com\/staging\/wp-content\/uploads\/2023\/07\/eNaira-.jpeg","jetpack_sharing_enabled":true,"_links":{"self":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/55252","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/users\/44"}],"replies":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/comments?post=55252"}],"version-history":[{"count":0,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/posts\/55252\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media\/55254"}],"wp:attachment":[{"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/media?parent=55252"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/categories?post=55252"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/coinscreed.com\/staging\/wp-json\/wp\/v2\/tags?post=55252"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}