eNaira: What to Expect From Nigeria’s Digital Currency and How it Will Work

eNaira

Moths ago, the Central Bank of Nigeria (CBN) announced that it was planning to launch a centralized and regulated digital currency called the eNaira. The digital currency was scheduled to be launched on the 1st of October but has since been moved indefinitely. To be clear, the eNaira is not a cryptocurrency, it is just the digital version of the fiat currency used in Nigeria which is the Naira (₦). According to the CBN, the introduction of the digital version of the Naira is in a bid to achieve financial inclusion and create a smoother way to make payments in Nigeria. With that said, here is what you should expect from Nigeria’s new digital currency and how it will work.

eNaira: The Launch

The CBN released the guidelines for the the launch. Here all you need to know about it:

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  • The eNaira shall be administered by the CBN through the Digital Currency Management System (DCMS) to mint and issue eNaira. What this means is, the CBN will be responsible for the issuing, distribution, and destruction of the eNaira digital currency.
  • Financial institutions shall maintain a treasury eNaira wallet for holding and managing eNaira on the DCMS. This means licensed financial institutions (commercial banks) in Nigeria will be able to request and issue the eNaira.
  • The CBN says the eNaira is all-encompassing. That is, it is created to serve individuals, businesses, NGOs, Government, Financial Institutions, etc.

eNaira Wallet

Users will be able to receive and transfer money from their wallet into other eNaira wallets, as well as transfer and receive money from bank accounts. There will be different tiers of the eNaira wallet with different criterials for use:

  • Tier 0 Wallet: This tier allows users with no bank accounts to create an account. All that is required is a passport photograph, name, and a NIN verified phone number. Users with this wallet tier have a daily transaction limit of twenty thousand naira (₦20,000), and a maximum cumulative balance of one hundred and twenty thousand naira (₦120,000).
  • Tier 1 Wallet: This wallet tier has the same criteria as the Tier 0 wallet. However, users on the tier 1 wallet have a slightly higher daily transaction limit – Fifty thousand naira (₦50,000). As well as a maximum cumulative balance of three hundred thousand naira (₦300,000).
  • Tier 2 Wallet: This tier requires that a user must own an existing bank account with a commercial bank in Nigeria. Users on the level have a daily transaction limit of two hundred thousand naira (₦200,000) and a maximum cumulative balance of Five hundred thousand naira (₦500,000). Users will also need to present a valid means of identification and their Bank Verification Number (BVN).
  • Tier 3 Wallet: This tier allows for a daily transaction limit of one million naira (₦1,000,000) and a maximum cumulative balance of five million naira (₦5,000,000). The minium requirement for this level is the same as the Tier 2.

eNaira Wallet Features

Below are some of the many features the CBN says the eNaira will be coming with:

  • Unified Payment System: Customers can now move money from their bank account to their wallet with ease.
  • Bank Account Management: Customers can monitor their wallet, check balances and view transaction history.
  • Peer-to-Peer Payment: Allows users to send money to one another through a linked bank account or card.
  • Contactless Payment: Customers can make in-store payment using their eNaira wallet by scanning QR codes.

Although the eNaira hasn’t launched officially, its website has gone live and commercial banks in Nigeria have begun integrating the e-Naira app. One benefit of the eNaira wallet is that transaction on it the platform will be entirely free. Users can carry out transactions on all four tiers of the wallet at no cost. What do you find most interesting about the new digital currency from the CBN? tell us in the comment section