5 important things you need to know about Nigeria’s digital currency, e-Naira

5 important things you need to know about Nigeria's digital currency, e-Naira

The website of the digital currency of the Central Bank of Nigeria, eNaira, went live yesterday. Already, it has recorded over a million hits which is a reflection of how much citizens are interested in this new digital currency.

Although the website displays an option to download an app from both the Google Play store and ios store, an attempt to do so reveals that it is not yet available for download.

The e-naira launch date is scheduled for October 1 but the governor of the Central Bank of Nigeria has said that it might be rescheduled to October 4 so as to not take the shine away from the nation’s Independence Day celebrations. But, for now, the countdown on the website still holds the original launch date.

There is a lot of scepticism and questions about this new digital currency. Below is an attempt to provide some answers to the most frequently asked questions:

1. How safe is the e-naira?

Like naira, the e-Naira would be held in an account under a commercial bank. The identity of the holder must be validated so as to prevent money laundering and other financial crimes.

The blockchain technology upon which the e-naira is built is nearly unhackable but there are still instances of human errors. Users of the e-naira wallet have to ensure that they have strong passwords to avoid easy guesses from hackers that can lead to loss of funds.

5 important things you need to know about Nigeria's digital currency, e-Naira

According to the central bank of Nigeria, The e-Naira system uses a two-factor authentication system in addition to cryptographic encryption to ensure the safety of customers’ wallets and the e-Naira holding.

2. Will fintech integrate e-naira into their payment services?

Fintechs have made banking easier for their users. Integrating the e-Naira will further make payments seamless. For now, there is no information regarding this but the apex bank will have to make public documentation that would enable merchants and developers to work on integrating such into their platforms.

Open banking forms part of the emerging areas within the fintech ecosystem. It grants third-party providers open access to consumer banking, transactions, and other financial data from banks and other financial institutions through the use of the Application Programming Interface (API).

5 important things you need to know about Nigeria's digital currency, e-Naira

Thus, with open banking, fintech and banks are able to communicate seamlessly through the networking of accounts and data across institutions for use by consumers, financial institutions, and third-party providers.

Speaking to a blockchain expert, he said it all depends on how the government structures it.

If it is open source, anybody can integrate it. But I doubt if it will be especially due to the high handedness when it comes to regulations. But if they make it easy using an API, then fintechs will surely integrate it.

Oly Ray, tech analyst and blockchain expert

3. Is the e-Naira a cryptocurrency?


There is a distinct difference between digital currency and cryptocurrency. As digital currency is the electronic form of fiat money, it is always backed by a centralised authority. The cryptocurrency is based on a decentralised system and independent of any centralised regulation.

Digital currency is usually stable and it is relatively easy to manage its transactions because of wider acceptance in the global market. Cryptocurrency is highly volatile and just recently gaining traction.

4. What is the value of an e-naira?

The e-Naira will be pegged to the Naira so their value remains the same as stable coins pegged to the dollar.

Stablecoins are a type of cryptocurrency linked to an asset like the U.S dollar that doesn’t change much in value. The fact that the e-Naira will be linked to the Naira is a source of concern as the Naira is not stable.

5 important things you need to know about Nigeria's digital currency, e-Naira

One e-Naira is equal to N1. So if you have N10m and N2m of it is in the digital currency wallet, you still have N10m.

5. Is the e-Naira available to the unbanked?

This is perhaps the exciting part of CBN’s move- finally, an effort to reach the unbanked- a great step towards financial inclusion.

According to CBN Governor, Godwin Emefiele, Nigerians can fund their e-Naira wallet using their bank account or with cash at a registered agent location.

The CBN will introduce digital currency in Nigeria - Godwin Emefiele
CBN Governor, Mr Godwin Emefiele

All that is needed is a NIN verified phone number and then they can transact using the e-naira. The disadvantage is that their transaction limit is low, ranging from 20,000 Naira to 300,000 compared to 200,000 to 5 million Naira that bank users can transact.

For example, places without banks can have an e-Naira agent. People who do not have a bank account can go to the agent with their NIN verified phone number and the agent will fund their wallet.

Using a USSD code, money from that wallet can be transferred to another.

In sum…

Overall, the idea looks quite comprehensive and if effectively implemented, could lead to remarkable changes in the nation’s economic sector. There are a few challenges such as data privacy and monitoring by the government but all these is yet to be seen.

All parties have to wait until the launch to know what works and what doesn’t and also how it can be improved overall.

Nevertheless, the e-Naira will be troubled by some of the current issues of the country including illiteracy, lack of power, lack of internet coverage, and the volatility of the Nigerian currency.

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