Nigeria and El Salvador’s opposing journeys into digital currencies

Nigeria is Africa’s largest economy and its most populous country. El Salvador is a small republic in central America. But despite their many differences, they have two economic problems in common. First, a large proportion of their populations don’t have access to bank accounts. Second, their economies rely heavily on remittances, money sent back by people living abroad. But the money transfer companies that facilitate these cash flows can be slow and costly. Nigeria banned bank trading of cryptocurrencies in February and then launched its own central bank digital currency, the eNaira, in October. Nigeria was only the second country in the world to launch a central bank digital currency, after The Bahamas. More may soon follow suit, including China, which in January expanded the pilot of its digital yuan to more areas, including the major cities Shanghai and Beijing. Nigeria’s decision to launch its own digital currency came as a surprise to many, says Iwa Salami, reader and associate professor in law at the University of East London in the UK and an expert on digital currencies. Initially, eNaira wallets are only available for people with bank accounts, but the plan is to extend access to anyone with a phone number in the future.