Thirteen Days Before E-Naira Launch, Here Are Six Things You Need To Know
In June 2021, the Central Bank of Nigeria (CBN) announced plans to launch a digital currency called ‘e-Naira’ by October 2021, joining 81 countries that are heavily considering digital currencies.
The CBN’s decision follows two years of thinking about digital currency technology. Additionally, the CBN’s intention to achieve 80% financial inclusion by the end of 2021 is another motivation to launch the digital currency.
While there is a lot of information out there about this soon to be launched digital currency, here are six things you need to know about the nature of this innovation:
It’s purely digital.
The e-Naira is said to be a central bank digital currency (CBDC), which means that although it is regulated by the CBN, it is a token that would only exist in digital and electronic form.
It is universally transferable.
The CBDC would be eligible for local and international transfers with little to no lag and cheaper transaction fees than physical currencies. In addition, it would allow you to transfer existing funds in your bank to your digital currency account.
It has a myriad of economic benefits
With the e-Naira, Nigerians can engage in easier cross-border trade, as well as enjoy a cheaper and faster inflow of funds. In addition, a digital currency would provide more financial opportunities for Nigerians, as they would be able to create new business opportunities and financial products and services.
According to the CBN, another benefit of the e-Naira is a reduction in operating costs and cash management. It would also leave a clearer footprint of digital transactions, making it easier for financial institutions to track transactions.
Read also: Nigeria’s inflation rate drops further to 17.01% in August – SNB report
Financial institutions would still be relevant
Digital currency would be implemented through a two-tier model that would allow a structure that leaves room for public-private partnership. Much like physical currency, the CBN will design the e-Naira but disseminate it through regulated financial institutions, which would then provide digital money to individuals and businesses.
It is not a cryptocurrency
Although all cryptocurrencies are digital currencies, it is important to note that not all digital currencies are cryptocurrencies. The e-Naira would be regulated by the Central Bank of Nigeria, but cryptocurrencies are not regulated by any government.
Implementation is on track
A recent development in the digital currency implementation process is the selection of a fintech technical partner, Bitts Inc. After a thorough selection process, as prescribed by Nigerian public procurement law, Bitts Inc. is became a partner of the CBN for this innovative project. project.
Bitts Inc. prioritizes the creation of payment systems that ensure increased social inclusion, financial inclusion and sustainable overall economic growth; the excellence of their operating methods has earned them recognition from the Bretton Woods Institutions – IMF / World Bank. This is one of the reasons the CBN enlisted them for this crucial exercise.
In addition, the company was the first fintech to digitize a national currency on a blockchain by creating a synthetic CBDC with the support of the Governor, the Central Bank of Barbados and the country’s Minister of Finance.
As Nigeria counts down to its 61st Independence Day, citizens can look forward to the start of a digital age where CBN prioritizes more citizen-centric financial operations.
According to the Geo-economics Center, the Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia and Gernada are five countries that have fully launched digital currencies; if things go as planned, Nigeria will be one of them.