The Central bank of Nigeria has recently sent a presentation to Nigerian banks on the development of the e-Naira project, The presentation covered a detailed explanation of how the eNaira would be constructed, administered and its operational module.
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According to the report, the eNaira is a legal tender for the gross country, also mentioning that it will possess a transaction limit for customers, a value-based transaction and a Non-interest-bearing CBDC status
To take hold of this new development the central bank has passed, and aid mass adoption of the e-naira, banks will have to stimulate customers and change the narrative about unsatisfactory services within the banking hall thereby giving world-class customer service to their customers.
To be able to partake in the e-Naira program, participants are categorized in five phases, Comprising of
- Monetary Authority Suite; The Central Bank will be handing the first product component that includes issue, distribute, redeem and destroy the currency. Store data on a cloud server, monitor and analyze currency transactions.
- Financial Institution Suite; licensed financial institution will be able to request currency or issue stablecoins, manage digital currency across branches, KYC, identify and AML compliance capability.
- eGovernment Suite; the government will b able to efficiently process digital payments sent to and received from citizens and businesses.
- Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis, and reconciliation.
- Retail Consumer Suite; features user-centred designs for a great user experience. The architecture will be expandable to enable innovation; features advanced privacy and security.
Subsequently, the transaction cost for the e-naira wallet has also been stated by the Central Bank. The digital currency infrastructure does not charge for P2P wallet transactions and user-to-merchant transactions.
Nigerian banks must facilitate the adoption and market the centrally issued digital currency as a cash alternative to existing and potential customers in support of the Nigerian apex bank’s goal for financial inclusion.
Nigerian banks will be allowed to invite all their customers to register for the e-Naira. Besides pre-generated codes, the banks can send invitation codes for onboarding to a specific list of selected customers. Onboarding will be done for customers who have a code assigned by their banks.
The banks have already validated and verified these customers. Additionally, the Central Bank stated the wallet provided by its institution was merely a stop-gap measure for meeting the deadline, given that banks and other licensed operators may provide their own sets since it didn’t intend to compete against the banks.
As part of the digital currency initiative, Nigeria’s central bank has made clear that NIBSS and other switching platforms will still be relevant, existing infrastructure can be integrated and leveraged in the e-Naira implementation.
Any Hope for the eNaira to rise in value like Bitcoin?
The eNaira will not grow or plummet in value like Bitcoin or other cryptocurrencies. Interestingly, the eNaira will function the same way the Naira does. The difference being the former is digital. The naira will be pegged to the Naira so their value remains the same, like stable coins pegged to the dollar.
The eNaira is pegged to the Naira, meaning it maintains the value of the Naira. If Naira is #500 at the time, the eNaira will be #500 too.
Practically, it works equivalent to stable coins and how their values are maintained. A stable coin is a cryptocurrency that is immune to volatility. They are pegged to with a fiat currency and hold the same value as the fiat.
As a National Critical Infrastructure, the e-naira system will be subject to comprehensive security checks, all data and personally identifiable information (PII) will be kept off the ledger and will not be stored on the ledger.