The Central Bank of Nigeria first mentioned an indigenous digital currency earlier this year after it placed a ban on the use of cryptocurrency in the country. According to Godwin Emefiele, cryptocurrency was being used as a catalyst for money laundering and terrorism activities, and the decision to launch e-naira – Nigeria’s indigenous digital currency, came as the need to replace the cut-out cryptocurrency options became more apparent.
The Central Bank has released a set of guidelines for the imminent e-naira ahead of its October 1st launch. Among the guidelines, the apex bank said that it was issuing a “speedy wallet” that’ll hold the digital currency ahead of banks launching their wallets. Using e-naira and the speedy wallet requires users to have acquired their National Identity Number (NIN) as without it they can’t make use of the e-naira. The speedy wallet is divided into three tiers for different kind of users. At the first tier, users will only be able to make transfers at a daily transfer limit of N50,000 and a cumulative balance of N300,000. At the second tier, users will be required to link a Nigerian bank account that has already been connected to their Bank Verification Number (BVN). If these conditions are not met, one cannot own a tier 2 wallet. The daily transfer limit will be set at ₦200,000 while the maximum balance will be ₦500,000. The tier 3 wallet also requires that a Nigerian BVN- linked bank account be provided. It has a daily transfer limit of ₦1,000,000 and a total balance of ₦5,000,000. There is also a merchant level that allows users to hold any amount they desire with a daily transfer limit of N1,000,000.
The Central Bank of Nigeria has named Barbados-based Bitt Inc. as the technical partner for the e-Naira project. This came in a statement from CBN’s Director of Corporate Communications – Osita Nwanisobi. The statement threw intimations that Bitt Inc. was selected from quite a long list of competitive bidders but the apex bank decided to settle with Bitt Inc. because of the level of its experience, track record of being efficient, high level of security, technical competence, etc. Bitt Inc. also worked with the Eastern Carribean Central Bank on the launch of its Central Bank Digital Currency (CBDC), and this is another reason the Central Bank of Nigeria chose to work with Bitt Inc.
If Nigeria successfully launches its Central Bank Digital Currency (CBDC) by October 1st, it could be the first African country to launch its indigenous digital currency. It is pertinent, however, to know that other African countries are also exploring CBDCs and are looking at launching one that can be used in their country by citizens.