The Central Bank of Nigeria (CBN), has make it clear that the Eleectronics Naira (E-Naira) is a legal tender and equal to the value of the naira and thus must be accepted as a form of payment by all merchants and business outlets in the country.
Things you need to know and the benefits of E-Naira
Nigeria Digital currency or Electronics Naira (E-Naira) is the electronic form of fiat money issued by governments. though, many confuse it with cryptocurrency which is a store of value secured by encryption.
The Nigeria central bank will be supervising digital currency, unlike Cryptocurrencies that are not regulated by any government, supervision is one of major reason why authorities warn against bitcoin, ethereum and the likes.
In accordance with the Atlantic Council, it was gathered that more than 80 countries are now exploring a CBDC against 35 countries in May 2020.
The United state of American and China the both giant economy nation banned crypto to allowing foreign visitors to use digital yuan if they provide passport information to the People’s Bank of China,
The Bahamian Sand Dollar was the first CBDC to become widely available; over 14 countries are in the pilot stage while 5 have fully launched.
They are the Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia, and Grenada.
In 2017, the CBN took the decision to digitize the Naira, following the rise in the use of digital payments and acceptance of the digital economy.
In late August 2021, the regulator announced the selection of Fintech company, Bitt Inc., as the Technical Partner.
The firm was key to the development and launch of the CBDC pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021.
The E-Naira would only exist in digital and electronic form. Individuals and financial institutions can track transactions easier E-Naira local and international transfers can be made within a little time and at cheaper rates. It simplifies cross-border trade and guarantees a faster inflow of remittances.
Users would be able to transfer existing funds in bank accounts to their digital currency account. E-Naira is expected to help Nigerians create new business opportunities, financial products and services, reduce the cost of operations and cash management.
The digital currency would be implemented through a two-tiered model to enable a structure that allows public-private partnerships.
The CBN will design the e-Naira but disseminate it through regulated financial institutions. They would provide digital cash to persons and businesses.
Everything things you need should know about the E-Naira:
The E-Naira is a currency that only exists in an electronic form.
The liability of the e-Naira money is directly borne by the CBN, the same way the liability of the physical naira rests on the central banker.
From October 1st, 2021, when the currency goes into effect, Nigerians can open E-wallets on their phones.
One of the benefits of digital currency is that it would reduce the cost of minting the physical naira and kobo.
The CBN Director, Payment System Management, Mr. Musa Jimoh added that charges of transferring funds would be lower for those using the E-naira.
Based on a CBN presentation on E-Naira, banks will be responsible for promoting and marketing the centrally issued digital currency as a cash alternative to existing and potential customers in support of its goal for financial inclusion.
The E-Naira, system will be subjected to comprehensive security checks, and all data and personally identifiable information will be kept off the ledger and not be stored on the ledger.