The rise in the popularity of digital currencies everywhere has made many nations think about creating a new digital currency platform of their own.
In 2021, the Central Bank of Nigeria (CBN) introduced e-Naira, a digital currency platform in Nigeria. The e-Naira claims to provide improved payment possibilities in retail transactions as compared to cash and acts as both a means of exchange and a store of value. The e-Naira was activated in the nation on October 25, 2021.
Do you want to know more about Nigeria’s digital currency? Keep on reading to explore everything you need to know about e-Naira.
What Is e-Naira?
The e-Naira is a digital form of the naira currency issued by the Central Bank of Nigeria. The digital currency of Nigeria, the e-Naira, will be completely complementary to the naira and have the same value as the actual money we use daily.
Contrary to what many people believe, the e-Naira is not a cryptocurrency similar to Bitcoin, Ethereum, Dogecoin, or any other type of cryptocurrency. Like cryptocurrencies, it is not decentralized and cannot be held in a private hand.
To ensure that the holder cannot own a duplicate or false e-Naira, the digital currency is built on blockchain ledger technology, similar to the other currencies.
How Does The e-Naira Work?
The e-Naira will function as the actual naira currency’s digital equivalent. The CBN-licensed financial institutions will be in charge of processing e-Naira payments, ID verification, and creating wallets for customers to store their e-Naira.
The e-Naira wallet can be taken similarly to a bank account, but it will be an independent account that is not linked to an existing bank account. Transactions between two people will be feasible if they both possess an eNaira wallet, which enables you to store, transmit, and receive e-Naira.
What Is e-Naira Wallet?
To access, utilize, and hold the e-Naira, you need the e-Naira wallet. The e-Naira can be exchanged between the e-Naira wallet and other Central Bank Digital Currencies. The only way to access the e-Naira, which is stored digitally in e-Naira wallets, is through digital wallets.
Is The e-Naira The Same Thing As Other Cryptocurrencies?
The e-Naira is not the same thing as other cryptocurrencies. In contrast to cryptocurrencies, e-Naira is a digital currency issued by the government of Nigeria. The integrity of the currency is significantly impacted by this difference.
The e-Naira will continue to have the same value as the Naira. Because of this, its value will not vary as other cryptocurrencies do. The e-Naira makes it simpler to conduct transactions digitally without the need for cash backing.
What Are The Different Categories Of e-Naira?
For those who want to register for e-Naira, there are different categories offered by it. The categories include Tier 1, Tier 2, Tier 3, Tier 4, and the merchants and businesses.
Tier 1 customers are the one who is unbanked and is required to register with a minimum of phone numbers. Tier 2 customers need a phone number and a verified bank account to register with e-Naira. The minimal requirement for Tier 3 and Tier 4 is BVN and active bank accounts.
The final category, merchants, and businesses can be registered with e-Naira by completing full KYC verification and need to accept the terms and conditions of CBN’s anti-money laundering and counterfeit terrorism.
Is There Any Transaction/Balance Limit For e-Naira?
There is a significant transaction and balance limit for using e-Naira.
The daily transaction and balance speed wallet limits for Tier 0 are each N20,000 and N120,000. The daily transaction and balance speed wallet limits for Tier 1 are N50,000 and N300,000.
Daily transaction and balance speed wallet limits for Tier 2 customers are N200,000 and N500,000, respectively. The daily transaction and balance speed wallet limit for Tier 3 clients are N1,000,000 and N5,000,000. However, there is no such limit for merchants.
Is There Any Extra Cost For Using The e-Naira Platform?
We can’t say that using the e-Naira platform is completely free of cost. It would refund the applicable fees as listed in the Guide to Charges by banks, and other financial and non-financial institutions.
Why Did The CBN Introduce e-Naira?
The CBN has put forward several reasons behind its decision to launch Nigeria’s digital currency platform. A few of them are:
- Increase the effectiveness of international payments
- Accelerate tax revenue and collection
- Advocate and assist access to financial services
- Rise the usage and availability of Central Bank currency
- Peer-to-peer payments by eliminating the intermediates
- Processing costs can be reduced
How Will The e-Naira Affect The Economy In Nigeria?
The effect of e-Naira on the economy of Nigeria is still unknown. According to CBN, the e-Naira will significantly enhance tax collection, payment processing, and financial inclusion. It is also expected that the e-Nira will encourage international trade, which can be beneficial for the economy of Nigeria.
e-Naira can’t replace the naira currency in Nigeria. Thus, you can still send money to Nigeria in regular ways.
