Nigeria is one of more than 80 countries exploring Central Bank Digital Currencies (CBDCs). In 2017, the CBN launched Project Giant to work on the research and development of e-Naira, its digital currency. The project’s pilot scheme should have begun on October 1st, 2021, but it was later postponed to an unknown date.
In the meantime, here are a few basics you ought to know about the eNaira:It is not a cryptocurrency. A CBDC such as the e-Naira is simply an electronic version of the fiat money issued by the government. Although CBDCs and cryptocurrencies use a similar blockchain and ledger distribution technology, a central bank or government regulates a CBDC, whereas cryptocurrencies are de-regulated. The value of the e-Naira and the fiat naira will be the same. It will not grow in value like Bitcoin or other crypto currencies, but it will function in much the same way as the Naira. You will be able to transfer the money in your bank account to your e-Naira account and use it to pay for goods and services. You can make these payments by simply scanning a QR code at designated pay points. The idea behind this, among other things, is to help promote the CBN’s cashless policy in Nigeria. It has a unique identity and security structure which makes it very easy for the CBN to track users and transactions in real-time. This way, the incidences of money counterfeits, money laundering, and other online financial crimes can be greatly reduced. eNaira just like it does the physical naira. However, regulated financial institutions will circulate it by creating customer identification and registration through an application product interface. The bank you chose when registering for your e-Naira account will also provide you with first-line customer support. Unresolved issues within 48 hours can be sent on to the CBN’s eNaira customer support. Smartphone users can download the eNaira app and create an e-Naira account on either the Google Play Store or Apple Store and create an e-wallet. Alternatively, the CBN will release a USSD shortcode to open and register for an e-Naira wallet. This will be especially helpful for non-smartphone users, thereby encouraging financial inclusion. Bitt Inc is the CBN’s technical partner on the e-Naira project. This means that the company will be in charge of development and possibly maintenance of the system network infrastructure for the digital currency. CBN said that the Barbados-based company was its best choice after a review of several competitive options.
In summary, the e-Naira project is part of the CBN’s plans to achieve 80% financial inclusion by the end of 2021. The e-Naira serves both as a medium of exchange and as a store of value. The CBN has said it has many advantages and hopes for a quick adoption once it is fully launched.