Nigeria makes history today as it ushers in Africa’s first Central Bank Digital Currency (CDBC), the eNaira, an exercise the Central Bank of Nigeria (CBN) has described as “one of the milestones of a long journey.” President Muhammadu Buhari will be unveiling the eNaira today, at the State House in Abuja.
The Central Bank of Nigeria (CBN) Governor, Godwin Emefiele, has stated that the eNaira will function as a wallet for users to hold funds in their bank accounts. The launch will put Nigeria on the global Central Bank Digital Currency (CBDC) tracking map as the fifth country to launch a centralized national electronic money after The Bahamas first released its version in 2017.
The eNaira’s release was earlier scheduled for October 1st, 2021, but the Apex Bank said it was postponed owing to other national activities to mark the 61st Independence anniversary of Nigeria.
Amidst the anxiety, some experts have warned that eNaira is one of the disruptive technologies banks will need to agree and adapt to; to avoid being overrun. In the design note, CBN said the eNaira “complements existing banking products and services and will not destabilize the existing system.”
Users are also expected to be linked with a commercial bank for complaints with Anti-Money Laundering and Combating the Financing of Terrorism (AMT/CFT) guidelines even as Nigeria’s CBDC leans towards the account model.
The eNaira payment system will be in alliance with AML/CFT guidelines to ensure the integrity of the financial system, which made the CBN adopt an account-based CBDC. With this, CBN will be able to identify users on the platform using the identified frameworks – Bank Verification Number (BVN) and National Identity Number(NIN).