9-day to CBN launch of e-naira, key things Nigerians should know

9-day to CBN launch of e-naira, key things Nigerians should know
CBN Governor, Godwin Emefiele

As the most populous black nation in the world, Nigeria counts down to her 61st Independence Day celebration, the Central Bank of Nigeria, CBN, launch of e-naira would be the top watch for traders, business owners, banks as well as households.

The apex bank has reiterated its move to prioritise seamless financial operations for Nigerians, as well as its intention to achieve 80 per cent financial inclusion by the end of 2021.

Toward the end of the first half of the year, CBN had announced plans to launch a digital currency dubbed the ‘e-Naira’ by October 2021.

This move according to available information will make Nigeria the number 82 countries strongly considering digital currencies.

While there is much information about this digital currency which is soon to be launched, below are six facts and understanding Nigerians need to be enlightened about.

Purely digital

The e-Naira would be a Central Bank Digital Currency (CBDC) which means that while it is regulated by the CBN, it is a token that would only exist in digital and electronic form.

READ ALSO: CBN and global instability, vulnerability of cryptocurrencies

Universally transferable

The CBDC would be eligible for local and international transfers with little to no time lag and cheaper transaction fees than physical currencies. Also, it would allow you to transfer existing funds in your bank to your digital currency account.

Myriad of economic advantages

With the e-Naira, Nigerians can engage in easier cross-border trade, as well as enjoy a cheaper and faster inflow of remittances. Also, 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 perk of the e-Naira is a reduction in the cost of operations and cash management. It would also leave a clearer footprint of digital transactions, making it easier for financial institutions to track transactions.

Financial Institutions would still be relevant

The digital currency would be implemented through a two-tiered model which would enable a structure that leaves room for public-private partnership. Just like the physical currency, the CBN will design the e-Naira but disseminate it through regulated financial institutions, which would then provide digital cash to individuals and businesses.

READ ALSO: Digital Currency: CBN to launch pilot scheme in October

Cryptocurrency

While 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 process of implementing digital currency is the selection of a technical fintech partner, Bitts Inc. After a thorough selection process, as prescribed by the Nigeria Public Procurement Act, Bitts Inc. emerged as a partner to the CBN for this innovative project.

Bitts Inc. prioritises the creation of payment systems that ensures an increase in social inclusion, financial inclusion and overall sustainable economic growth; the excellence in their operation methods has earned them acknowledgment from the Bretton Woods Institutions – IMF/World Bank. This is one of the reasons the CBN enlisted them for this crucial exercise.

Also, 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, Central Bank of Barbados and the country’s Minister of Finance.

According to the Geo-economics Centre, 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 according to plan, Nigeria will be amongst them.

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