CBN launches eNaira ahead of schedule as platform goes live

Sopuruchi Onwuka

The federal government has finally launched the much awaited eNaira platform, attracting instant traffic surge as millions of Nigerians pry into the website to explore possibilities of offgrid financial transactions.

The eNaira, a Central Bank Digital Currency (CBDC) was launched ahead of the October 1 schedule

The Central Bank of Nigeria’s eNaira website has gone live ahead of schedule to serve as medium of exchange and a store of value. The digital money is touted offer better payment options in retail transactions when compared to cash payments.

The Central Bank of Nigeria takes direct liability on eNaira while commercial banks take responsibility for customer deposits in their custody.

Among many advantages that the digital money brings is the ease of diaspora remittance as the CBN directly interfaces with intermediary financial service providers in ensuring security of transaction and data protection.

The apex bank assures that eNaira will cultivate economic growth, provide cheaper remittances, limit fraudulent behaviour, and is secure, among other benefits for its use.

Commercial banks in the country had mobilized staff and customers with information that the CBN) is set towould launch the eNaira on October 1, assuring users that  the eNaira would be a digit representative of the paper Naira currency issued by the Central Bank of Nigeria complementary legal tender with the same parity of value with the Naira.

Customers are told that the eNaira is built on a blockchain open ledger technology for authenticity, but would not earn any interest to holders.

The eNaira will not be stable coin or a cryptocurrency backed by reserves.

Banks in the campaign assure that the eNaira is safe and secure for transactions and easily acceptable in cashless deals with every retailer who understands that the power of blockchain protection.

According to the staggered roll out plan, the CBN will first issue the e-Naira to financial institutions like banks which would then retail the e-money to you the customers who may not necessarily hold deposit accounts with them.  

Key identification requirements for transaction with eNaira, according to the banks, include a bank verification number (BVN) and a mobile phone that is verified with National Identification Number or NIN.

On the advantages of the new digital currency, government and its partners in the financial services industry point at its zero or low cost of transaction, and traders would enjoy zero fees for withdrawals and deposits to and from their bank account. This, according to them, will reduce the cost of commerce while improving safety.

For easier and cheaper diaspora remittances, the CBN will integrate the e-Naira into its forex process for easier remittances to Nigeria.  The transfers, according to guides seen by our correspondents, could be from the CBN crediting e-Naira directly to the International Money Transfer Organisation (IMTO).

The eNaira is also recommended for inflation control by eliminating price mark ups associated with figure rounding to convenient currency notes. With the e-Naira, banks argue, it would become possible to transfer the exact cash price in the marketplace, especially in rural areas.

The eNaira, according to the banks, would play key roles in the unfolding African Continental Free Trade Agreement (ACFTA) which collapses cross border flow of goods and services in the continent.

They point out the e-Naira could easily for the ECOWAS currency which could be used by any two parties who can credit a Nigerian banking institution with corresponding currency.

“This means a trader banking with UBA in Burkina Faso can settle his import bills from the Gambia using e-Naira,” one of the banks explained.

The financial institutions and FINTECH start to build out an ecosystem with eNaira as the base product as the market unfolds, banks say.

With BVN and NIN information available online, the risk of malicious actors hacking into personal financial data from phones remain a concern.