eNaira: Nigeria’s ambitious bid to launch its own cryptocurrency

Nigeria is working with fintech Bitt Inc as a technical partner to launch the country’s own cryptocurrency – the eNaira. This is according to the Central Bank of Nigeria (CBN). Bitt Inc is from Barbados and, earlier in 2021, it led the development of the Eastern Caribbean Currency Union’s ‘DCash’ – the first digital cash issued by a currency union central bank.

According to Reuters, 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.

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How the eNaira will operate

The eNaira would operate as a wallet against which customers can hold existing funds within their bank accounts. Officials from the Central Banks suggest that the currency would accelerate financial inclusion in Nigeria, and allow for cheaper, and quicker remittance inflows.

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.

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Consumer Wallet System

The Central Bank of Nigeria 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.

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