The era of e-Naira and all you must know before Oct 1st , 2021

The Federal Government of Nigeria through the The Central Bank of Nigeria (CBN) announced that it would be introducing  e-Naira , a  form of digital currency that allows exchange between people online after the ban on Cryptocurrency because it is was not issued by a Sovereign Authority, among other reasons.

What is Digital Currency ?

Digital currency is a form of currency that is available only in digital or electronic form. It is also called digital money, electronic money, electronic currency, or cybercash. it is exchanged using technologies such as smartphones, credit cards, and online cryptocurrency exchanges. In some cases, it can be transferred into physical cash, for example by withdrawing cash from an ATM.

Transactions involving digital currencies are made using computers or electronic wallets connected to the internet or designated networks.

Digital currencies also enable instant transactions that can be seamlessly executed across borders. For instance, it is possible for a person located in the United States to make payments in digital currency to a counterparty residing in Singapore, provided they are both connected to the same network. It has all the characteristics of normal physical currencies like durability, portability, divisibility, uniformity, limited supply, and acceptability.

According to The Central Bank of Nigeria, ENaira will be will be launched on October 1, 2021. Below are some things you should know about it:

1: eNaira will aid complete payments much faster than current means, like ACH or wire transfers, which can take days for financial institutions to confirm a transaction. 

2: This digital currency will allow easy transaction and less expensive international transfers, but is it different from any other digital currency because it will be issued by a sovereign authority, which is the CBN.

3: The e-Naira will aid financial inclusion and propel a cashless policy according to the CBN

4: They can ease implementation of monetary and fiscal policy

5: The eNaira will not rise and fall in value like Bitcoin or other cryptocurrencies.

6: e-Naira, which was created to facilitate digital transactions, does not need to be backed with physical cash.

7: The e-Naira will be pegged to the Naira so their value remains the same like stable coins pegged to the dollar.

8: 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.

9: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.

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