Yesterday, the Central Bank of Nigeria (CBN) announced that it has awarded the contract for its eNaira digital currency to Bitt, a global fintech company specializing in central bank digital currency (CBDC) solutions. As previously reported, pilots are due to start in October.
The startup was key to the launch of the Eastern Caribbean Central Bank’s CBDC pilot in April of this year. It is now entering the African market with the continent’s biggest population.
“Bitt is proud to partner with the Central Bank of Nigeria to launch the first live retail CBDC in the largest economy in Africa. Digitizing the Naira will benefit the entire Nigerian financial ecosystem,” said Bitt’s CEO, Brian Popelka.
The company’s primary corporate mission is to enable financial access for citizens, merchants and banking institutions. It stated financial inclusion as a key aim for the Eastern Caribbean CBDC, and a similar focus is being brought to the development of the eNaira.
Currently, 23.7% of the Nigerian population are unbanked. This may be due to high costs of financial services, travel time to branches, lack of identity documents, or poor trust in institutions.
As a digital form of cash, a CBDC would help make cash more accessible and enable the population to participate in Nigeria’s growing e-commerce economy.
Equally, improving cross border payment efficiency is another priority for the CBN. In 2020, Nigeria’s total remittances amounted to $17.2 billion, reported the World Bank. A CBDC may enable swift direct remittance payments between Nigerians living at home and abroad.
Meanwhile, Bitt is controlled by Medici Ventures which used to be a wholly-owned subsidiary of Overstock but is now now a limited partnership venture fund.
Nigeria is one of several African countries exploring a central bank-backed digital currency. In June, the Bank of Ghana confirmed that its CBDC work was quite advanced. Other African states that are exploring CBDC include Morocco, South Africa and Egypt (as of 2018).
Elsewhere in Asia, Singapore has just announced 15 finalists for its Global CBDC Challenge and Bitt provided one of the solutions. Though it has not committed to launching a CBDC itself, Singapore is searching for the best retail CBDC solutions.