Central Bank of Nigeria Introduces e-Naira after Banning Cryptocurrency

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Alt: = "photo showing hand holding bundles of 5 Naira notes"

The Central Bank of Nigeria (CBN) has announced its plan to launch Nigeria's digital currency known as e-Naira.

According to CBN, the e-Naira will be launched on October 1, 2021.

E-Naira is a form of digital currency that allows exchange between people online.

CBN banned the use of cryptocurrency because it is not being issued by a Sovereign Authority and has no legal backing, it could be used to finance terrorism, among other reasons

The Bank of Britain had also earlier said it was going to  launch its own digital currency to replace Cryptocurrency in the country.

What you should know about e-Naira 

This digital currency will allow easy transaction but it is 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.

It will not grow in value like Bitcoin or other cryptocurrencies but it will function the same way the Naira does.

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.

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.

Read also: Advantages and Disadvantages of Central Bank of Nigeria's Digital Naira

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