The launch of Nigeria’s central bank digital currency (CBDC) e-Naira is a positive move and does not present a problem for cryptocurrencies, according to Marius Reitz, General Manager for Africa at Luno crypto exchange.

Reitz says the move recognises the potential of blockchain technology, but it won’t be easy to convince stakeholders (including banks, merchants and businesses) to readily adopt the currency in order for it to gain early traction.

He believes it could take up to a decade for the entire country to adopt the e-Naira. “The main consideration for the CBN is that it may take a very long time to move from the pilot phase to legislation (potentially 10-20 years) and cryptocurrencies could have a considerable rise in popularity during this time.”

According to Reitz, in the meantime the CBDC and cryptocurrencies can co-exist - like fiat and digital currencies do today, despite their different mechanisms (open vs. closed systems).

He adds that in a free market like Nigeria, value will always “flow to the system that is most useful and valuable to people.”

On 25 October Nigeria became the largest economy to date to launch a CBDC pilot and the first in Africa.

Despite a rocky start and poor reviews of the Android version of its app, the situation seems to have normalised and the currency seems steady.

President Muhammadu Buhari said the e-Naira would improve remittances, cross-border trade and financial inclusion.

He projected an improvement in the country’s economy and an increase in GDP by US$29-billion over the next ten years.