How To Make Use Of The ENaira, The Digital Currency Issued By The Central Bank Of Nigeria
How to Make Use of the eNaira, the Digital Currency Issued by the Central Bank of Nigeria
Earlier this week, President Muhammadu Buhari officially unveiled the eNaira, the country's first central bank digital currency (CBDC), at the nation's State House in Abuja, making Nigeria the first African country to do so.
The digital currency, which is issued by the Central Bank of Nigeria (CBN) and is based on a private blockchain technology developed by Bitt Inc, has the same value as fiat or physical currency and is issued in the same denominations as both.
The eNaira wallet (dubbed "Speed"), which is a distributed ledger-based digital wallet, will be the primary means of accessing and using the new currency. The wallet can be obtained from various app stores, including the Google Play Store and the Apple App Store, among others.
However, there are still some reservations about the eNaira.
Let us dig deeper
Customers' onboarding and integration of the eNaira wallet functionality into financial institutions' digital banking channels are the responsibility of the financial institutions.
For eNaira to be accessed, held, and used, both individuals and merchants/businesses must have access to and possession of a wallet. Also available is the ability for users to complete transactions by dialing a USSD shortcode and following the on-screen instructions.
According to the Central Bank of Nigeria's guidelines, the requirements for opening a wallet, transaction and balance limits, as well as the transaction types that are available, are determined by the wallet tier to which a user belongs and the wallet tier to which the user belongs.
Following its launch on Google Play Store less than 48 hours later, the dedicated eNaira individual wallet received over 100,000 downloads before being removed following a series of complaints and low ratings. More than 10,000 copies of the merchant version had been downloaded at the time of writing.
Aside from P2P transfers between friends and family, the wallet currently supports the following eNaira transaction types: payments for goods or services made to businesses by individuals; payments made to governments by individuals; and payments made to individuals by governments for public services.
Also available are the ability for Nigerians to transfer money directly from their bank accounts to the eNaira speed wallet and vice versa, receive support allowance directly from the Central Bank of Nigeria (CBN) through government-to-person (G2P) transfers, and perform any other services that the CBN may approve from time to time.
A merchant's wallet can be used to send money to and receive money from his or her bank accounts, as well as to conduct merchant/business-to-person transfers (M/B2P). Aside from that, merchants must deposit their balance(s) into their bank accounts on a daily basis.
In order to receive and send eNaira payments for goods and services, as well as salary payments, eNaira Merchant speed wallets can be used in conjunction with a bank account.
A number of commercial banks, including Stanbic IBTC and Guaranty Trust Bank, have already posted how-to guides on their respective websites. Individual and merchant users, according to the banks, will benefit from the wallet because it will make transactions more secure, faster, more affordable, and more convenient.
Over time, the CBN envisions a scenario in which financial institutions work together to develop an ecosystem of services, such as cross-border transfers, with the eNaira serving as the foundation currency for all of these services. If a Nigerian trader has a UBA account, he or she can use eNaira to settle import invoices from China, for example.
Aside from that, digital currency has the potential to bring a significant portion of Nigeria's population who currently do not have bank accounts into the formal financial system of the country. It is necessary to have a phone number in order to open a Tier 0 wallet, whereas it is necessary to have a mobile number as well as an official national identification number in order to open a Tier 1 wallet (NIN).
In this way, a plumber or vulcaniser in Oyo or Cross River State who does not have a bank account can accept payments through his phone, store them in his wallet, and transact with any vendor.
Besides that, the Central Bank of Nigeria (CBN) plans to integrate the eNaira into its forex process through international money transfer operators (IMTOs) in order to facilitate the receipt of remittances from Nigerians abroad.
Transactions on the eNaira platform is free for the first 90 days since October 25, Monday. After that, the CBN's guide will specify that banks will begin charging at the rates specified in the guide.
