Overview
The eNaira is a digital version of the Naira that also acts as legal tender issued by the Nigerian Central Bank (CBN). By having the exact exchange value as the Naira and retaining parity of value with Naira, the tender intends to support Naira, although virtually: How to Use eNaira
Furthermore, this is based on blockchain open ledger technology, which prevents duplication and the manufacturing of fraudulent eNaira notes because each note is unique. It’s Nigeria’s remake of a Central Bank Digital Currency, which are digital currencies developed and authorized by central banks across the globe.
This was formally launched on October 25, 2021, after an earlier deferral on October 1, 2021.
No, this is not a cryptocurrency. Unlike Bitcoin and other cryptocurrencies, the eNaira is a government-issued digital money that serves as legal tender in the same way as the Naira does. This means that instead of going to a commercial bank, consumers can get their money straight from the CBN. It is also tied to the physical Naira, thus its value will not vary at a separate rate than the Naira owing to market influences.
Because its value is tied to the physical Naira and eNaira does not pay interest, it cannot be used for wealth accumulation or investment like other cryptocurrencies.
IT essentially provides digital stability by making it simpler to conduct digital transactions without the use of real cash. It also prohibits commercial banks from acting as intermediates in eNaira transactions, with the exception of it Wallets.
Don’t forget to Download the enaira app
How will the it work?
This will only be available through eNaira Wallets, which are digital wallets that store the eNaira. In order to utilise it, you must have the itWallet, which is maintained and controlled on the distributed ledger.
Currently, the CBN will supply it to intermediaries (licenced financial institutions) for onward distribution to individuals (from their Stock Wallet). As a result, these financial institutions will keep a treasury wallet in order to receive it from the CBN. ID authentication, it payment processing, and the development of wallets for consumers to hold it will be overseen by financial institutions authorised by the CBN. Customers can use the its Naira app t o find a bank of their choice, link to their bank accounts, and conduct transactions.
The CBN has set out in the eNaira white paper, a tiered form for KYC operations as stated below:
| Tiers of Customer | Minimum Registration Requirements | Account Balance Maximum | Daily Transactions Limit |
| Tier 1 (Non-Bank Account Holders) | Telephone number (awaiting NIN verification) | N20,000 | N120,000 |
| Tier 2 (Non-Bank Account Holders) | Telephone number (NIN verified) | N50,000 | N300,000 |
| Tier 3 (Customers with an existing Bank account) | Bank verification number (BVN) | N200,000 | N500,000 |
| Tier 4 (Customers with an existing bank account) | Bank verification number (BVN) | N500,000 | N5,000,000 |
| Merchants and Businesses | Full KYC requirements (including BVN, TIN and Bank confirmation) and compliance with the anti-money laundering and counterfeit terrorism regulations of the CBN | Unlimited | No Limit (with auto sweep trigger) |
Benefits of eNaira
As stated above, there are various stated benefits that consumers can obtain from using eWallet. For starters, there is no need for a third party in transactions, which might save time and money. This means that instead of dealing with money administered by a bank, users hold it in their eNaira Wallets, which is similar to having digital cash. The removal of intermediaries is projected to cut transaction time and expense, as well as make cross-border transactions easier.
Furthermore, when compared to commercial e – banking, the introduction of eNaira would save customers money because daily transactions between accounts will be free of charge to the account holder. This will enable traders and individuals who deal in trade to operate at a cost-effective rate on a regular basis.
Other advantages of the eNaira include increased financial inclusion of underserved individuals, easier access to tailored social services for Nigerians, and a decrease in fraud cases and illicit financial activities such as tax evasion thanks to the eNaira’s unique ID.
In what ways will the eNaira launch have an impact on the public?
Individuals, homes, enterprises, non-governmental organisations (NGOs), religious institutions, Nigerians in diaspora, and governments at all levels would be able to use the virtual money.
Are there any guidelines regulating eNaira?
CBN released the “Design Paper For The eNaira” eNaira design White paper on October 24, 2021, which reveals the aims, values, and the eNaira project proposal. Its architectural design, initial eNaira capabilities, what roles different economic players play when the eNaira is launched, the vulnerabilities of it and how they will be handled, and the Implementation roadmap are all covered in further depth in the White Paper. The following is taken from the eNaira white paper:
- The Naira shall be managed by the CBN through the Digital Currency Management System (DCMS) to issue it and its unique code run through blockchain technology.
- It will be a hybrid or a two-tiered CBDC architecture – CBN will issue the CBDC, including managing the central ledger of all transactions, while leveraging the existing financial system.
- It is based on Hyperledger Fabric variant of the DLT – this will allow the CBN to manage wallets while financial institutions and regulated market players will act as nodes on the network.
- It will use existing identity infrastructure – BVN, NIN, TIN etc. – to uniquely identify individuals and corporate entities to ensure a robust KYC framework.
- Financial institutions shall keep a treasury eNaira wallet for securing and administering it on the DCMS.
- The eNaira is based on Hyperledger Fabric variant of the Distributed Ledger Technologies (DLT). This will allow the CBN to manage wallets while financial institutions and regulated market players will act as nodes on the network
- The two-factor authentication and other measures shall be implemented to guarantee the security of the eNaira wallet in line with data security regulations.
- The charges for eNaira transactions shall conform with the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions, released by the CBN.
- Financial Institutions are mandated to abide by the Money Laundering (Prohibition) Act 2011 (as amended), the Terrorism (Prevention) Act 2011 (as amended) and all subsisting anti-money laundering laws and regulations as may be issued by the CBN at any time.
- The eNaira will not earn interest.
10 key things to know
1 . It’s the digital form of the Naira
The eNaira is the digital form of the Nigerian physical Naira currently in circulation. It is issued by the CBN in line with Section 19 of the CBN Act. In essence, it is a direct liability of the Nigerian apex bank. Built on a blockchain open ledger technology that prevents duplication or creation of fake units, each eNaira note will be unique and different.
2. Is the eNaira same as Cryptocurrency?
No, it isn’t. It is simply a digital currency issued and backed by the authority of the Nigerian government and is a legal tender equivalent to the physical cash. It is quite unlike Bitcoin and other cryptocurrencies that have no backing of established authorities. The eNaira is pegged against the traditional Naira and will not fluctuate due to market influence at a different rate from the traditional Naira. The eNaira basically eases transactions and offers digital stability, thus reducing the need for physical cash.
3. eNaira at par with N1
It is a legal tender and will form part of the currency-in-circulation. More importantly, the e-naira will be at par with the physical Naira, maintaining the same exchange value as the Naira What this means is that one eNaira is of the same value with one traditional Naira i.e N1=1 eNaira.
4. What’s eNaira Wallet?
Its wallet is required to access, use and hold the it. The eNaira will be exchangeable for other Central Bank Digital Currencies (CBDC). The eNaira will be made accessible only through the eNaira Wallets which is the digital storage that holds it.
5. How exactly will eNaira work?
It will be provided by the CBN to intermediaries (i.e financial institutions) who would in turn help supply to individuals/customers. These institutions would maintain a treasury wallet to collect eNaira from the CBN. They would thereafter oversee ID verification, eNaira payment processing, and generation of wallets for Nigerians to keep their eNaira. Through the app, customers would be able to identify a bank of their choice, connect to their bank accounts and carry out transactions.
6. Are there transaction or/and balance limits?
Yes, there are transaction and balance limits for individual eNaira wallets. These have been drawn out by the CBN.
For Tier 0, the daily transaction and balance speed wallet limits are N20,000.00 and N120,000.00, respectively. For Tier 1, daily transaction and balance speed wallet limits are N50,000.00 and N300,000.00, respectively.
For Tier 2 customers, daily transaction and balance speed wallet limits are N200,000.00 and N500,000.00, respectively. Finally, for Tier 3 customers, daily transaction and balance speed wallet limits are N1,000,000.00 and N5,000,000.00, respectively, while there isn’t any limit for Merchants.
7. How do you onboard and make use of the platform?
Yes, there are various requirements for onboarding. The onboarding of Financial Institutions (FIs) shall be done automatically by the CBN while Merchants shall be onboarded by the FIs upon downloading the “eNaira Speed Merchant App” from the app stores and fulfillment of certain registration requirements.
The MDAs shall be onboarded by the CBN upon receipt of the appropriate mandate.
Consumer onboarding shall be self-service upon downloading of the “eNaira Speed App” from the app stores and fulfillment of certain requirements, including (a) provision of all mandatory requirements; (b) acceptance of the Terms and Conditions of eNaira speed app; and (c) acceptance of the Privacy Policy of eNaira speed app.
8. Are there charges for using the eNaira platform?
The CBN said that charges for transactions that originate from the eNaira platform shall be free for the first 90 days commencing from October 25, 2021. However, it would revert to applicable charges as outlined in the Guide to Charges by Banks, Other Financial and Non-bank Financial Institutions.
9. Why eNaira in the first place?
The eNaira is expected to complement traditional Naira as a less costly, more efficient, generally acceptable, safe and trusted means of payment. In addition, the CBN said in its guide that it will improve monetary policy effectiveness, enhance government’s capacity to deploy targeted social interventions and boost remittances through formal channels. There is the elimination of third party in transactions which could reduce time and cost of transactions. More importantly, there is the ease with which it would complement inclusion of excluded people in the financial system.
10. Who will be affected by the digital disruption?
A major advantage that the e-naira brings is deepening of financial inclusion. Hence, it would ease financial transactions and affect individuals, businesses, non-governmental organisations (NGOs), religious institutions, Diaspora Nigerians, MDAs, etc.
The categories include Tier 1 (unbanked) customers who are expected to register with telephone numbers being the minimum requirement (for those awaiting NIN verification). The Tier 2 customers equally are expected to register with Telephone number (NIN verified). For Tier 3 and Tier 4 customers with existing bank accounts, the minimum requirement is BVN.
For the last category, merchants and businesses, the registration requirement include full KYC requirement (including BVN, TIN and Bank confirmation) and compliance with the Anti-money laundering and counterfeit terrorism regulation of the CBN.