After the sudden ban of cryptocurrency by the Central Bank of Nigeria, E-Naira was introduced as a legal alternative.
E-Naira is a digital currency that enables exchange between people online. It was invented in collaboration with the famous FINTECH company known as, Bitt inc.
Cryptocurrency was banned due to it not being issued by a renowned autonomy. This prompted the immediate creation of the e-naira.
It has been reported that the issue date for the e-naira has been set for October 1, 2021.
Listed features of the e-naira include the following:
- It works differently from cryptocurrency as it is issued by the government and a known autonomy (CBN)
- According to CBN, the e-Naira will provide help for financial inclusion and promote the progression of a cashless policy.
- It will not grow or increase in value like cryptocurrency but it will function the same way the Naira currency does.
- It will be associated with the Naira so it sticks with it in value, much like the cents-dollar relationship.
- It will identify as a legal tender for the entire country, it will possess a non-interest bearing Central bank Digital Currency status, a transaction limit for customers and a value-based transaction limit.
- 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.
- The e-Naira system will be subjected to a mandatory and comprehensive security check, all data and personally identifiable information (PII) will be excluded from the ledger.
- Increased cross-border trade.
- Cheaper and faster remittance inflows.
- Payment systems efficiency.
- Tax collection.
And many others.
Earlier in the year, the CBN directed Nigerian banks to close all accounts of individuals or organizations involved in cryptocurrency transactions and trading.
It warned about the risk cryptocurrencies pose, as they are not regulated.
CBN also warned that cryptocurrency would lead to loss of investment, money laundering, terrorism financing, illicit fund flows and other fraudulent activities.
Bitt Inc. is a vital piece to the development and successful launch of the central bank digital currency (CBDC).
They previously did the same for Eastern Caribbean Central Bank (ECCB) on April 2021.