Months after the ban on the use of cryptocurrency by the Central Bank of Nigeria because it is not issued by a sovereign authority, used for money laundering and terrorism, the government agency is set to launch Nigeria’s digital currency called eNaira.
The CBN is working with a Barbados fintech company, Bitt Inc as a tech partner to help it launch eNaira.
eNaira is a form of digital currency that allows exchange between people online. According to the CBN Governor Godwin Emefiele, the eNaira would operate as a wallet against which customers can hold existing funds in their bank account.
Also, the currency will accelerate financial inclusion and enable cheaper and faster remittance inflows. He added that the cryptocurrency would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection.
eNaira will be launched on October 1 2021.
What You Need To Know
eNaira, which was created to facilitate digital transaction does not need to be backed with physical cash.
Also, it will allow easy transaction, aid financial inclusion and propel a cashless policy. However, it is different from other digital currency because it will be issued by a sovereign authority.
Due to being issued by a government, eNaira works differently from other cryptocurrencies. Unlike other digital currencies, it will not grow in value but will function the same way the Naira does.
Moreover, the digital currency will be pegged to the Naira so it value remains the same like stable coins peegeed to the dollar.
Furthermore, it will be created independently off bank accounts; the wallet will be created by financial institutions that will create customer identification through an application product interface.
eNaira is a legal tender for the entire country, which will have a non-interest bearing Central Bank Digital Currency status, a transaction limit for customers and a value based transaction limit.
Therefore, as a National Critical infrastructure, the eNaira system will be subjected to comprehensive security check thereby all data and personally identifiable information will be kept of the ledger and not stored on the ledger.
