The Central Bank of Nigeria’s (CBN) eNaira website has gone live a week before the planned launch of the digital currency.
The website promises easier financial transactions for users of eNaira, offers opportunity for peer-to-peer payments which allows users to send money to one another through a linked bank account or card; allows customers to move money from their bank account to their eNaira wallet with ease; can monitor their eNaira wallet, check balances and view transaction history; and make in-store payment using their eNaira wallet by scanning QR codes.
In addition, customers are allowed to scan the QR Code on the website to get started.
CBN Governor, Mr. Godwin Emefiele, while speaking to a gathering of foreign investors in New York, recently, had told his audience that because of activities surrounding the country’s Independence celebration on October 1, the earlier planned launch of the eNaira on same date would likely be rescheduled to October 4, 2021.
“The central bank would not want the event to take the shine away from the Independence celebration,” he said.
“We are going to be the first country in Africa to launch a digital currency. It is a novel idea because we think it will facilitate trade, Nigeria being the biggest economy in Africa, this will set the tone to tell Africa that we are ready to lead and we would indeed lead in trade and we would make sure that happens.
“Between all central bankers in ECOWAS, we are already working on certain collaboration to make trade, payment and banking system integrate in such a way to set example on the African Continental Free Trade Area (AfCFTA),” he added.
In line with global trend, the CBN recently took a major step towards the launch of its digital currency with its formal announcement of its engagement of global fintech company, Bitt Inc. as its technical partner for the project. To choose the technical partner, the CBN went through a rigorous vendor selection process in line with the Public Procurement Act, conducted by seven departmental directors and a Deputy Governor whereby several companies were evaluated. The evaluation was based on the following criteria: technology ownership and control; implementation timeline; efficiency, ease of adoption; support for anti-money laundering and combating the financing of terrorism (AML/CFT); platform security; interoperability; implementation experience.
Emefiele expressed optimism that the eNaira, would bring about increased cross-border trade, accelerate financial inclusion and lead to cheaper and faster remittance inflow. He said the digital money would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection.
According to him, after its unveiling, Nigerians should be able to download the eNaira app from either Google plays store or Apple app store, on board themselves and fund their eNaira wallet using their bank account or with cash at a registered agent location.
“If you are a bank customer and you have say N10 million in your bank account, for your comfort of spending and making purchase, you can tell the bank to load N2 million out of your N10 million into your wallet.
“So, your bank balance in physical cash drops to N8 million, while your e-wallet carries N2 million. With that you can make purchases both within and across the country.
“There are so many variance of the eNaira. But this is where we would start because we are not going to pretend that there are not risks in opening your system up. We would look at the various products, determine the risk, determine the best way to mitigate the risk before we now open it up more and more,” Emefiele added.
Also shedding more light on Bitts, he said, “we chose them as a partner. In some other climes where they are, they have their software and they earn their money. But we chose that they would establish their company in Nigeria. “The CBN will own substantially stake in that company. It is a company that will be established in Nigeria and majority holding will be the CBN,” he added.
On his part, the CBN’s Director, Corporate Communications Department, Mr. Osita Nwanisobi, explained that the eNaira project had been a long and thorough process for the apex bank following its resolve in 2017, to digitise the local currency after extensive research and exploration.
Meanwhile, China’s central bank last weekend announced that all transactions of crypto-currencies are illegal, effectively banning digital tokens such as Bitcoin.
“Virtual currency-related business activities are illegal financial activities,” the BBC quoted People’s Bank of China to have said, warning it “seriously endangers the safety of people’s assets”. China is one of the world’s largest crypto-currency markets. Fluctuations there often impact the global price of crypto-currencies.
The price of Bitcoin fell by more than $2,000 (£1,460) in the wake of the Chinese announcement.
It was the latest in China’s national crackdown on what it sees as a volatile, speculative investment at best – and a way to launder money at worst. Trading crypto-currency had officially been banned in China since 2019, but had continued online through foreign exchanges. However, there has been a significant crackdown this year.
In May, Chinese state intuitions warned buyers they would have no protection for continuing to trade Bitcoin and other currencies online, as government officials vowed to increase pressure on the industry.
In June, it told banks and payment platforms to stop facilitating transactions and issued bans on “mining” the currencies – the trade of using powerful computers to make new coins.
eNaira to Become Critical National Infrastructure
The Central Bank of Nigeria (CBN) has said its new proposed Central Bank Digital Currency (CBDC) called eNaira should be handled as a critical national infrastructure launched to protect the nation against operational and cyber-security risks.
The central bank stated this in its latest report titled “CBN Update Vol.3, No. 8 of August 2021” released on Monday, October 11, 2021.
In the report, the apex bank said it was introducing regulatory and compliance mechanisms to prevent disruptive competition for electronic money. Also, stated was that the e-Naira would co-exist with the traditional payments system while the CBDC is to address interoperability risks that might be associated with the implementation.
CBDC would, among other things, usher in ways of payment and create new players in the financial system, the report added. Mentioned in the statement was that the medium to long-term pay-off increased efficiency of operations which was expected to offset initial outlay, adding that the introduction of limits on the e-Naira holdings would mitigate risks of disintermediation.
The two-tiered model for CBDC, the report stated, was to facilitate a public-private partnership arrangement whereby, the Bank would design the eNaira and distribute it through regulated financial institutions, where digital cash to individuals and businesses would be provided. Individuals and businesses would be able to make transfers real time and offline through all payment channels to other individuals and businesses.
The Bank further stated that the e-Naira would provide lower cost of operations and cash management in addition to improved visibility and insight of transaction data for financial institutions. It would also improve opportunities in the financial system, creating new business opportunities from emerging business models, financial products, and services.
eNaira: Central Bank of Nigeria Issues New Regulatory Guidelines on Digital Naira
The Central Bank of Nigeria on Monday issued a new regulatory guidelines on the Central Bank Digital Currency (CBDC), eNaira.
According to the document titled “Regulatory Guidelines on the eNaira” and seen by Investors King, users shall have the option to disclose whether the eNaira wallet being created will be used personally or as trustees.
It reads “The Central Bank of Nigeria, under the Central Bank of Nigeria (CBN) Act 2007 and the Banks and Other Financial Institutions Act (BOFIA) 2020, is empowered to issue legal tender currency, ensure financial system and promote the development of electronic payments system. The Bank, in furtherance of its mandate, hereby issues the following guidelines for the operation of the eNaira.
“The eNaira is the digital form of the Naira, issued by the CBN in line with Section 19 of the CBN Act. It is a direct liability of the Bank, a legal tender and will form part of the currency in circulation and will be at par with the physical Naira (that is 1:1).
“The eNaira shall complement traditional Naira as a less costly, more efficient, generally acceptable, safe and trusted means of payment. In addition, it will improve monetary policy effectiveness, enhance the government’s capacity to deploy targeted social interventions and boost remittances through formal channels.
“The eNaira wallet is required to access, use and hold eNaira. The eNaira will be exchangeable for other Central Bank Digital Currencies (CBDC).”
CBN Postpones Launch Of eNaira
The Central Bank of Nigeria on Thursday announcedthe postponement of the planned unveiling of the digital currency, eNaira.
The launch was initially scheduled for October 1, but was postponed due to other activities lined up to commemorate the country’s 61st Independence Anniversary.
The apex bank’s Director of Communications, Osita Nwasinobi, explained in a statement that the CBN took the decision to postpone the launch, which had been initially planned to coincide with the Independence anniversary, in deference to the mood of national rededication to the collective dream of One Nigeria.
The statement was titled, “CBN defers eNaira launch to mark Independence Anniversary”
It read in part, “Ahead of the anticipated launch of Nigeria’s Central Bank Digital Currency, known as eNaira, the Spokesman of the Central bank of Nigeria, Mr. Osita Nwanisobi, says the planned unveiling on October 1, 2021 has now been deferred due to other key activities lined up to commemorate the country’s 61st Independence Anniversary.”
While assuring that there was no cause for alarm, Nwasinobi said the CBN and other partners were working round the clock to ensure a seamless process that will be for the overall benefit of the customer, particularly those in the rural areas and the unbanked population.
Reiterating the benefits of the eNaira, he stressed that Nigerians would be able to carry out peer-to-peer transfer to another person’s eNaira wallet as well as pay for goods and services at selected merchants.
He added that the eNaira would also help reduce the use of cash and ensure stability of the Nigerian economy.
On the readiness of banks and other financial institutions in the financial ecosystem for the launch of the eNaira, he reiterated that the digital currency was a journey.
He explained that not all banks customers were expected to commence transaction on the day of the launch.
The CBN Spokesperson, however, assured that financial institutions in Nigeria remained key actors and were a critical part of the Central Bank Digital Currency.
Nwanisobi also noted that the CBN was mindful of concerns expressed about the eNaira, being among the first CBDCs in the world.
According to him, the Bank had put a structure in place to promptly address any issue that might arise from the pilot implementation of the eNaira.
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