Evaluating the evolution, implementation, and future prospects of central bank-based digital currencies: A case study of Nigeria’s e-Naira

This research examines the development, implementation, and future prospects of central bank digital currencies (CBDCs), focusing on Nigeria’s e-Naira. The rise of digital currencies and blockchain technology has provided new payment options worldwide. CBDCs are increasingly seen as faster and cheaper alternatives for transactions, with potential benefits for payment settlements, financial inclusion, and monetary policy effectiveness. The e-Naira was introduced to complement Nigeria’s physical currency, representing a significant initiative by the Central Bank of Nigeria (CBN). As of March 2024, more than 130 countries were actively researching CBDCs, with three countries, territories, or currency unions having already launched CBDCs and 36 conducting pilot programs globally. This study delves into blockchain technology as a precursor to cryptocurrencies, analyzes recent trends in monetary policy, explores global factors driving CBDC emergence, and examines the e-Naira’s future trajectory. It also discusses key policy considerations and proposes strategies to promote e-Naira adoption. By synthesizing these aspects, the research offers a comprehensive view of CBDCs within Nigeria’s financial landscape, highlighting challenges and opportunities in digital currency adoption.