Nigeria is working with fintech Bitt Inc as a technical partner to launch the country’s own cryptocurrency – the eNaira – according to the Central Bank of Nigeria (CBN).
The Barbados-based Bitt Inc earlier in 2021 led the development of the Eastern Caribbean Currency Union’s ‘DCash’ – the first digital cash issued by a currency union central bank.
Reuters writes that the CBN plans to launch the digital currency in October after the country barred its banks and financial institutions from dealing in or facilitating transactions in cryptocurrencies at the beginning of the year in February.
Godwin Emefiele, the CBN’s Governor, has said that the eNaira would operate as a wallet against which customers can hold existing funds within their bank accounts. In a statement on Monday, Emefiele said the currency would accelerate financial inclusion in Nigeria, and allow for cheaper, and quicker remittance inflows.
The CBN has also released new guidelines via a presentation seen by TechCabal on how the eNaira digital currency will be regulated, designed and issued. The eNaira is expected to become a legal tender for all of Nigeria and is set to be accessible to both bank account and non-account holders.
Consumer Wallet System
The Central Bank is planning to implement a three-tier consumer “speed wallet” system in order to meet the October deadline. The system will be issued by the apex bank before other banks and licensed operators can provide their own wallets for the eNaira.
This first tier of the wallet system is open to anyone without a bank account. This tier comes with a transfer limit of N50,000 ($121.46) and a cumulative balance of N300,000 ($728.74) fixed daily. All one needs to open this tier 1 wallet is a National Identity Number (NIN).
For tier 2 wallet users, an existing bank account with a linked bank verification number (BVN) is the minimum requirement. Tier 2 users are restricted to sending and receiving at most N200,000 ($485.83) daily and having a balance of N500,000 ($1214.57).
Tier 3 wallet holders can transact up to N1,000,000 ($2429.13) daily, with the cumulative balance at N5,000,000 ($121,45.65). Like tier 2 wallets, a BVN number is the requirement for this tier.
The eNaira will also launch with a non-interest-bearing CBDC status, and there won’t be any charges on merchant services, user-to-merchant and peer-to-peer wallet transactions.
CBN has said that other Nigerian banks are to “…market and promote the adoption of eNaira as a digital version of cash to existing and potential customers, in support of financial inclusion objective of the CBN.”