Six things to know about CBN’s digital currency, E-Naira effective October 1

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The Central Bank of Nigeria (CBN) had in June 2021, unveiled a new monetary policy to launch a digital currency, known as ‘e-Naira’ by in 2021, in alliance with 81 countries in the world paving ways for digital currencies in global commerce.

The CBN has been considering the monetary innovation on the digital currency technology in the past two years.

Before the official launch, here are six things to know about the digital currency, E-Naira:

It’s completely digital

The e-Naira will operate in purely digital and electronic processes, no physical contacts, and would be identified as   Central Bank Digital Currency (CBDC).

It’s not a Cryptocurrency

Not all digital currencies are cryptocurrencies; though, all cryptocurrencies are digital currencies. The e-Naira is clearly regulated by the Central Bank of Nigeria (CBN) while cryptocurrencies are not regulated by any government.

Universally transferable

The E-Money, CBDC, can be used for local and international transfers at cheaper transaction fees than physical currencies, as well as taking little or no time lag to process.  The digital currency also permits one to transfer funds in bank accounts to digital currency account.

Several economic advantages

Facilitates easy easier cross-border trade, including cheaper and faster inflow of remittances. Digital currency further provides more financial opportunities for users, empowers them to create new business opportunities and financial products and services.

The CBN noted that the e-Naira also encourages a reduction in the cost of operations and cash management; leaves a clearer footprint of digital transactions, making it easier for financial institutions to track transactions.

Financial Institutions remains relevant

According to the CBN, 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.

Implementation is on track

The CBN indicated that in the process of implementing digital currency, a technical fintech partner, Bitts Inc has been selected.

It was highlighted that 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., it was said, 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 was said to be  one of the reasons the CBN enlisted them for the implementation of digital currency in Nigeria.

Profile of Bitts Inc.

Bitts Inc. has been identified as the first fintech company to digitize a national currency on a blockchain by creating a synthetic CBDC with the support of the Governor of Central Bank of Barbados, and the Minister of Finance.

The CBN is looking forward to launch the digital currency, E.Naira, on October 1st, Nigeria 61st Independence Anniversary.

The Geo-economics Centre, the Bahamas, Saint Kitts and Nevis, Antigua and Barbuda, Saint Lucia, and Gernada, revealed that five countries have fully launched digital currencies; Nigeria may be the sixth.