On e-Naira’s Launch And What To Expect

Like every other aspect of society, the financial world is being affected by changes arising from the emergence of transformative technology. With the global adoption of digital currency imminent, Central Bank Digital Currencies (CBDCs) are potentially the most important innovations in the story of money’s evolution. Fiat money has had a long run and the emergence of digital currencies promises to bring that journey to an inevitable end.

Technology is sweeping change across the globe, and with financial innovations like cashless transfers, QR Payments, online payments, etc., the need to carry around physical cash continues to diminish. Even cross-border payments have been made easy thanks to several innovations. The use of these cashless options and digital currency is becoming fast-paced and central banks are joining the train to not be left behind. The provision of money is one of the core responsibilities of central banks but this is changing as a result of the emergence of digital money. Digital currencies provide people with access to money and financial services with no limitation and control from any institution or body but this is prone to so many disadvantages especially when circulating in economies without any regulation.

While digital money is an advanced representation of money and offers people “liberation”, if not regulated can be detrimental to the economy. Hence the need for central bank digital currencies (CBDCs). Central bank digital currencies take on the functions of money but on a digital level; they offer in digital form the peculiar advantages of central bank money which include settlement, liquidity, etc.

All these might still sound a little strange to you, so…


What are Central Bank Digital Currencies (CBDCs)?

Simply put, central bank digital currencies are electronic forms of central bank money. They are also referred to as digital fiat money or digital-based money. In other words, they are electronic representations of the money we are used to seeing and using for purchasing goods and services.

According to Wikipedia, central bank digital currencies was directly inspired by Bitcoin. Bitcoin is the world’s most used cryptocurrency and has been in a lot of controversies since it came around? A central bank digital currency could as well be compared to a cryptocurrency such as Bitcoin but what makes a central bank digital currency what it is, is that it is issued by a country’s central bank. Cryptocurrencies on the other hand are not issued by a central bank or a bank at all. Another thing that differentiates a CBDC from a cryptocurrency is that a CBDC is less likely to use a distributed ledger known as a blockchain.

Central bank digital currencies are borne out of the need to issue and control digital currencies and in extension, the digital economy. The activities of cryptocurrencies, when not regulated, can hurt a country’s economy. This is why countries are on their toes hoping to issue an indigenous digital currency as soon as possible.

Countries across the world have already begun to either launch or develop their CBDCs and Africa’s giant launches its CBDC called the e-Naira tomorrow.

Here’s what you need to know…


Nigeria’s CBDC – the e-Naira

According to Nigeria’s central bank, the e-naira has been in development for about two years. Rakiya Mohammed, an Information Technology Specialist with the Central Bank of Nigeria, during an online news briefing at the end of a Bankers Committee meeting held months ago said that “when eventually issued and operational, Nigeria’s digital currency would complement cash notes”. According to the Information Technology Specialist, the CBN is issuing a digital currency to take on its plans of making remittances travel from other countries to Nigeria safe and easy to do. She emphasized that having a digital currency would accelerate the ability to meet the target irrespective of where people are based.

The apex bank has released guidelines on how the e-naira will be operated by commercial banks. Citizens are expected to use a wallet that will be provided by the central bank. Commercial banks will have the power to launch their wallets in the future. The wallet comes in three tiers and each with its peculiarity and there is an additional one for merchants. Barbados-based Bitt Inc. was named as the technical partner for the e-naira project and will work with the central bank to issue the e-naira.

The e-naira is, therefore, the digital version of the naira. It can be used for traditional functions of money such as transactions, remittances, payments, etc.

The central bank launched the e-naira website days ago and according to the website, the “e-Naira is a Central Bank of Nigeria-issued digital currency that provides a unique form of money denominated in Naira. e-Naira serves as both a medium of exchange and a store of value, offering better payment prospects in retail transactions when compared to cash payments. e-Naira has an exclusive operational structure that is both remarkable and nothing like other forms of central bank money”.

The website also said that “when the idea was mooted, it was not a bandwagon response to create a CBDC like the rest of the world. We set out with a plan to become a trusted ally to the numerous customers we will serve and our roots continue to be firmly grounded in them. We know what they need because we listen to them every step of the way. No matter where we are in the journey, our goal remains the same – you”.

With the e-Naira just about 24 hours away from launching, it is quite pertinent to know what people are saying about it.


What people are saying about the e-Naira

The Nigerian financial scene is known for being a controversial one. In the past, there has been the introduction of policies and changes that have been mostly frowned upon.

According to experts, the e-Naira in itself is not a bad idea. The question is if Nigeria is ready for that phase. While experts agree that the e-naira project is a great idea, many feel that the country has not gotten to a phase where it should be issuing the e-naira. They feel like the country hasn’t created a system that will allow the e-naira to thrive effectively. A project like the e-Naira would only work in a stable community where citizens have fully embraced cashless policies and where there are systems in place to support its use, experts conclude.

For citizens, the e-naira will prove to be quite alien, at first, as the population of people using cashless or “advanced” methods of payments is far lower than the population of people that rely on the traditional payment system and fiat money.

What to expect

The major thing to expect from the e-naira project is that the adoption rate will be slow. The number of people expected to embrace the e-naira will be quite low, the CBN confessed. The apex bank expects the metric for adoption to pick up as time goes on.

The CBN has ordered every business within the shores of Nigeria to accept the e-Naira. So it is expected that wherever one goes, one would be able to use the e-naira without any difficulty.

Banks and other licensed financial institutions are expected to launch their e-naira wallets.

Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation for the e-naira.

Nigeria’s financial inclusion gap is also expected to narrow following e-Naira’s launch.



Nigeria’s e-Naira launches tomorrow hopefully. This will make it the first African country to launch a central bank digital currency (CBDC) and give the country a spot in the elite list of countries that have launched a central bank digital currency or plan to do so. Although there are rumours that the launch of the e-Naira may be delayed till the 4th of October but no official statement has been made about a change of date for the e-Naira launch. Until an announcement is made, the e-Naira is expected to launch tomorrow.

With the e-Naira’s launch hours away, what are your thoughts?

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