Initially, the CBN’s app for CBDC used QR codes for transactions, but in order to boost eNaira adoption and improve the CBDC mobile app, the central bank has integrated Near Field Communication (NFC) technology, enabling convenient and contactless payments, as per the local news outlet, The Sun.
The CBN has introduced NFC technology to enable smooth communication between mobile devices and payment terminals.
NFC is a short-range wireless connectivity technology that facilitates device-to-device communication through magnetic field induction.
Joseph Angaye, the deputy director of the CBN's risk management department, emphasized the significance of embracing innovative technology at the eNaira sensitization workshop at the University of Abuja, saying that the upgrade will play a crucial role in the adoption of the CBDC.
According to Angaye, eNaira has evolved and implemented many useful features, saying:
“There are many benefits of the eNaira app. The world is going digital and the CBN cannot afford to lag behind. So, when there’s a new technology, we embrace it."
Furthermore adding:
"We were like the second nation to launch the eNaira app. The app has many uses and advantages. It can be programmed."
In addition, the eNaira app incorporates several programmable features that enhance its practicality and functionality. For instance, it can be modified for use in specific locations or for specific items, making it especially valuable for conducting intervention programs.
This programmability allows authorities to ensure that funds are allocated solely for their intended purposes, effectively preventing any misuse or diversion.
"That’s the beauty of it. Speed of transaction, reduction of settlement risks have all been taken care of by the CBN’s eNaira."
In 2021, Nigeria made history by launching eNaira and becoming one of the pioneers in offering a CBDC globally. Despite high hopes, the initial adoption rates fell short of expectations, driving the CBN to explore various strategies to increase usage. One such strategy was the introduction of use cases in the transport sector and the integration of USSD functionality into the eNaira offering.
Despite the CBN's efforts, Godwin Emefiele, the former CBN governor attributed the slow growth of the eNaira to commercial banks prioritizing their profitability over expanding the CBDC.
It's important to mention that Nigeria's central bank had previously prohibited banks and financial institutions from facilitating transactions in digital currencies back in 2021.
Even with the ban in place, residents in Africa's most populous country, Nigeria, continue to comprise the largest volume of digital currency transactions conducted on peer-to-peer trading platforms outside of the USA.
