E-Naira: All you need to know about CBN Nigeria’s digital currency
A multitude of nations globally over the recent months have contemplated establishing their digital currencies, a trend that has surged with the advent of cryptocurrencies.
One of the aspects of cryptocurrencies that has been perceived as a drawback by various governments worldwide is the absence of oversight; this has prompted numerous nations to pursue creating a digital currency they can supervise and control.
Consequently, Nigeria, through the Central Bank of NigeriaCBN, joined 80 other nations in the pursuit of digital currencies.
As per the records, the Bahamian Sand Dollar is the initial Central Bank Digital Currency (CBDC) to become extensively accessible; it has been disclosed that over 14 countries are in the preliminary phase while five nations have fully launched.
The countries that have successfully launched their CBDC comprise: Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia, and Grenada; furthermore, Nigeria is anticipated to join this list shortly.
According to the reports, the Nigerian digital currency termed E-Naira is expected to be launched on the 1st of October in celebration of the nation’s 61st independence day.
Reports indicated that the inception of E-Naira commenced in August 2021 after Fintech firm Bitt Inc. was recognized as the technical collaborator of the CBN.
While some Nigerians have expressed discontent regarding the selection of a foreign fintech to assist with the launch of the E-Naira rather than a domestic fintech, since Nigeria boasts some of the finest fintech companies in Africa, the choice of Bitt Inc. is attributed to its proficiency in CBDC.
Bitt Inc. was significantly engaged in the development and initiation of the CBDC pilot for the Eastern Caribbean Central Bank (ECCB) in April 2021.
Additionally, it is essential to understand that E-Naira is not classified as a cryptocurrency; it will function in the capacity of a wallet for digital currency.
E-Naira is not an investment like typical cryptocurrencies; this is due to the fact that no interest would accrue on it.
In contrast to cryptocurrencies that are decentralized, the Central Bank will oversee and govern E-Naira.
Nigerians interested in E-Naira will need to possess the National Identity Number (NIN), which will be the fundamental requirement for establishing an account.
There will also be straightforward transfers from a bank account to an E-Naira wallet and vice versa. Nigerians will also be enabled to transfer money seamlessly within and outside Nigeria.
While the CBN will craft the e-Naira, patrons and businesses will access it through multiple financial institutions.
An analysis of the E-Naira indicates it is an alternative method of payment via the internet, and Nigerians are already accustomed to something similar due to the existing cashless policy.
The only aspect that appears to be a positive feature of the E-Naira is that it will be free from any charges; meaning transactions via the wallet will incur no fees, unlike standard banking transactions that involve various charges.
However, there are speculations that this might not last long as there are assumptions that financial institutions will devise means to introduce charges.
As October 1st approaches, Nigerians await the introduction of the E-Naira.
