By Emeka Anaeto, Business Editor

There are indications that the Central Bank of Nigeria, CBN, is almost ready to usher in a new level of financial transaction experience in Nigeria called eNaira.

Last week the apex bank announced the formal engagement of the global Fintech company, Bitt Inc., as the Technical Partner for its digital currency which is due to be unveiled later in the year.

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Industry analysts have said that ‘Project Giant’, as the Central Bank Digital Currency (CBDC) pilot is known, has been a long and thorough process for the CBN, with the Bank’s decision to digitize the Naira in 2017, following extensive research and explorations. Given the significant explosion in the use of digital payments and the rise in the digital economy, the CBN’s decision follows an unmistakable global trend in which over 85 percent of Central Banks are now considering adopting digital currencies in their countries.

The apex bank’s Director of Corporate Communications, Mr Osita Nwanisobi, said that CBN’s selection of Bitt Inc, from among highly competitive bidders, was hinged on the company’s technological competence, efficiency, platform security, interoperability, and implementation experience.

According to him, ‘‘In choosing Bitt Inc, the CBN will rely on the company’s tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean Countries.’’

The other spring of confidence in the Bitt Inc. partnership was that the firm was key to the development and successful launch of the CBDC pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021.


The CBN says the digital currency will offer parity of value and will operate as a non-interest-bearing asset.

In a sensitization document sent to commercial banks in the country, the CBN outlined several design features of the digital currency.

According to the document, Nigeria’s digital currency will run alongside the country’s fiat currency, with the CBN responsible for issuing, distributing and redeeming the digital currency among other monitoring and management functions.

Based on the sensitization document, Nigeria’s digital currency will function under a tiered Anti-Money Laundering and Know Your Customer (AML/KYC) structure with different transaction limits.

The bottom of the AML/KYC pyramid will reportedly encompass unbanked citizens who will be mandated to provide their national identity-linked phone numbers for verification. Users in this category will be limited to a daily transaction limit of N50,000 (about $120).

Citizens with bank accounts can fall under the second and third tiers depending on the number of AML/KYC steps completed. These two levels will have daily limits of N200,000 ($487) and N1 million ($2,438), respectively.

Users of the third tier will likely have to complete a physical AML/KYC verification process in addition to the bank verification number, BVN, requirements stipulated for tier two.

Users classified as merchants will also fall under the same N1million limit as tier three but will have no restrictions as to the amount they can send to their bank accounts.

With this, it shows the CBN plans to ensure seamless transfers between e-naira wallets and bank accounts with no fees for several types of transactions. The zero-fee structure is likely a means to incentivize the adoption of the digital currency, especially amid complaints about the onerous transaction costs associated with mobile and digital banking in the country.

The CBN document also offered likely process flows for international money transfer operators (IMTO) and the proposed e-Naira indicating plans to integrate the digital currency with the CBN’s foreign exchange, Forex, control policies.

Usage options

The first option proposed by the CBN will see the apex bank providing collateralized e-Naira credit to IMTOs via their banking partners in the country. A second option might see the CBN pre-funding IMTO accounts, but this method might carry significant exchange fluctuation risks.

A third option offered by the CBN will involve the e-Naira operating in the current Forex architecture where overseas remittance will be cashed out in digital currency by the beneficiary in Nigeria.

How to use the e-Naira

To use the e-Naira to transact, users will have to download the speed wallet, validate their account on the wallet by using either their phone number, National Identity Number (NIN) or Bank Verification Number (BVN). Once done, users can begin to use the wallet. According to the presentation, users will be able to send money using Peer-to-Peer (P2P) transactions through their wallets to other wallet holders, Person-to-Merchant/Business where e-Naira users can pay for items to merchants who have the e-Naira wallet and vice versa.

CBN is ready

Vanguard MoneyDigest learnt that the CBN may conduct a proof of concept, the Nigerian side of the pilot scheme in October, meaning arrangements are already near completed for the commencement of public participation and usage of digital currency in Nigeria.

Integrated tech infrastructure

Earlier in June, 2021 Nigeria’s communications minister, Isa Ali Pantami, had linked the government’s efforts to drive blockchain adoption as an integral part of digital innovation in Nigeria. This means the e-Naira will be efficiently running on a composite hitech infrastructure in the country, encompassing virtually all aspects of the national life.

Rakiya Mohammed, Director, IT Department at the CBN has been speaking on the road maps and features of the eNaira.

She collaborated the information from Pantami when she said the eNaira will run on a blockchain technology known as the Hyperledger Fabric.

Benefits of eNaira

Expected benefits as listed by CBN’s Governor, Mr. Godwin Emefiele, include cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows.
Others are easier targeted social interventions, as well as improvements in monetary policy effectiveness, payment systems efficiency, and tax collection.

The e-Naira will also benefit as it will make governmental remittances easier.

A presentation to banks in Nigeria by CBN shows how the Government Ministries, Departments and Agencies (MDAs) will be onboarded and use the e-Naira to do remittances to their staff and members of the public once there is mass adoption of the e-Naira and how citizens can make payment to MDAs using the e-Naira.

The e-Naira will also be able to better implement the CBN’s cashless policy.

Another point will be the reduction in the need for printing money in the long term. As more people adopt the CBDC as a means of payment, the need for paper currency will drop and the government can spend less on printing since they can easily issue new coins or e-Naira through the Hyperledger Fabric Blockchain.

Data from the Central Bank of Nigeria‘s annual report, which was compiled by the currency operations department, shows the nation spent a total of ₦307 billion on printing banknotes between 2014 and 2019.

In addition, the cases of financial fraud can be easily tracked as the government will be able to monitor the flow of money in and around the country as it provides transparency and is difficult to counterfeit.


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