The Central Bank of Nigeria (CBN) will on October 1, 2021 launch a new digital currency called “e-Naira”, after the ban on Cryptocurrency.
It is a form of digital currency that allows exchange between two or more people online.
CBN banned the use of cryptocurrency because it is not being issued by a Sovereign Authority, among other reasons.
Below are some things you need to know about it:
- This digital currency will allow easy transaction but is it different from any other digital currency because it will be issued by a sovereign authority, which is the CBN.
- A digital currency issued by a government works differently from cryptocurrency like Bitcoin.
- According to the CBN, the e-Naira will aid financial inclusion and propel a cashless policy.
- e-Naira, which was created to facilitate digital transactions, does not need to be backed with physical cash.
- It will not grow in value like Bitcoin or other crypto currencies but it will function the same way the Naira does.
- The e-Naira will be pegged to the Naira so their value remains the same like stable coins pegged to the dollar.
- The e-Naira will be created independently of bank accounts; the wallet will be created by financial institutions that will create customer identification through an application product interface.
- It is a legal tender for the entire country, it will have a non-interest bearing Central bank Digital Currency status, a transaction limit for customers and a value-based transaction limit.
- As a National Critical infrastructure, the e-Naira system will be subjected to comprehensive security check, all data and personally identifiable information (PII) will be kept off the ledger and will not be stored on the ledger