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e-Naira to be released on 1st October

Thu 23 Sep 2021 ▪ 20h47 ▪ 3 min read — by Mary Anderson

The Central Bank of Nigeria (CBN) announced on Wednesday, 22nd September, that it has completed the preparatory stage and is ready to launch its CBDC, e-Naira, on 1st October.

This was announced by CBN’s Director of Information Technology, Rukiya Mohammed, on Wednesday during a webinar on the topic: “Digital currency and the prospects of CBDC in Nigeria”.

She noted that 85% of central banks globally are working on creating their own digital currencies. In addition, in Nigeria, digital payments are becoming more popular, while cash is in decline.

e-Naira plans

“CBDC would contribute to macro-economic growth in the country. If people adopt more of the usage of the e-Naira, it would enhance more data to formulate macroeconomic policies,” Rukia Mohammed said.

“Also, when more countries have their own digital currencies, it would increase the exchange of currency and facilitate cross border trade at a lower cost,” she said.

She added that the CBN will cooperate with foreign currency technology providers, including MasterCard. The Central Bank of Nigeria will initially focus on low amount payments and instant settlement with low cost.

“CBDC would be legal tender with one e-Naira equivalent to one naira which shows fundamental differences between CBDC and crypto currencies,” she said.

Dr Adesola Adedutan, managing director of First Bank Nigeria, said that there are significant differences between CBDCs and cryptocurrencies. CBDC provides a platform for governments to leverage blockchain technology to maintain a centralised and institutional role over the currency.

Background information about e-Naira

The electronic Naira will be the digital representative of the paper currency Naira issued by the Central Bank of Nigeria. e-Naira will be an “additional” legal tender in Nigeria, having the same exchange value as the Naira, and maintaining “parity of value” with the Naira.

According to nairametrics.com, e-Naira will not earn any interest to its holders. The electronic Naira is based on blockchain technology with open ledgers. Creating e-Naira on the blockchain makes it impossible to be duplicated. Each e-Naira banknote will be unique.

Nigerian CBDC is being implemented despite the strict crypto regulation by the CBN and the negative attitude of some officials. Therefore, in spite of all the advantages, we can’t brush aside the personal interest of those in authority.

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Mary Anderson avatar
Mary Anderson

I am sure that crypto assets are a new type of economy. We are at the origins of the crypto revolution. Right now, it is worth studying what cryptocurrencies and the blockchain are in order to make the most of this knowledge and these skills in the future.

DISCLAIMER

The views, thoughts, and opinions expressed in this article belong solely to the author, and should not be taken as investment advice. Do your own research before taking any investment decisions.

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