The e-Naira, Nigeria digital currency, has five important characteristics that you should be aware of
The e-Naira, Nigeria's digital currency, has five important characteristics that you should be aware of
The website for the Central Bank of Nigeria's digital currency, the eNaira, went live just a couple of days ago. Already, it has received more than a million visits, which demonstrates how much interest citizens have in this new digital currency.
A visit to the website displays an option to download an app from both the Google Play store and the Apple Store, but an attempt to do so reveals that the app is not yet available for download from either store.
The launch of the e-naira was originally scheduled for October 1, but the governor of the Central Bank of Nigeria has indicated that it may be postponed to October 4 in order to avoid interfering with the nation's Independence Day celebrations. However, for the time being, the website's countdown clock continues to display the original launch date.
Regarding this new digital currency, there is a great deal of skepticism and skepticism. In an attempt to provide some answers to the most frequently asked questions, the following are provided:
1. Will financial technology companies integrate the e-naira into their payment services?
Fintech companies have made banking more convenient for their customers. The integration of the e-Naira will further streamline the payment process. There is no information available at this time, but the central bank will be required to make public documentation that will allow merchants and developers to begin working on integrating such into their platforms in the near future.
Open banking is one of the emerging areas within the fintech ecosystem, and it is a part of that. Through the use of the Application Programming Interface (API), it provides third-party providers with open access to consumer banking, transactions, and other financial data from banks and other financial institutions (API).
Fintech and banks will be able to communicate seamlessly with one another as a result of open banking, which will allow the networking of accounts and data across institutions for the benefit of customers as well as financial institutions and third-party service providers.
In an interview with a blockchain expert, he stated that everything is dependent on how the government structures it.
2. How safe is the e-naira in terms of value?
It would be held in a commercial bank account, similar to how the naira is currently held. It is necessary to validate the identity of the account holder in order to prevent money laundering and other financial crimes.
Despite the fact that the blockchain technology on which the e-naira is built is nearly impenetrable, there are still instances of human error in the system. To avoid being targeted by hackers who are looking for easy targets, users of the e-naira wallet must use strong passwords to protect their accounts from being compromised.
It is stated by the Nigerian central bank that the e-Naira system, in addition to cryptographic encryption, employs a two-factor authentication system to ensure the security of customers' wallets and the e-Naira holding.
3. Is the e-Naira a cryptocurrency or a fiat currency?
No.
When it comes to digital currency, there is a distinct difference between it and cryptocurrency. Digital currency is always backed by a centralized authority due to the fact that it is the electronic form of fiat money. Based on a decentralized system, cryptocurrency is completely independent of any centralised regulatory authority.
The widespread acceptance of digital currency on the global market ensures that it is usually stable and that it is relatively simple to manage its transactions. Cryptocurrency is a highly volatile asset that has only recently begun to gain traction.
4. Is the e-Naira accessible to those who do not have bank accounts?
This is perhaps the most exciting aspect of the CBN's move—finally, a concerted effort to reach the unbanked—a significant step forward in the direction of financial inclusion.
According to Governor of the Central Bank of Nigeria, Godwin Emefiele, Nigerians can fund their e-Naira wallets using their bank accounts or with cash at a designated registered agent location.
All that is required is a phone number that has been verified by the NIN, and then they can transact with the e-naira. However, one disadvantage is that their transaction limit is low; it ranges from 20,000 Naira to 300,000 Naira, as opposed to the 200,000 to 5 million Naira that bank customers can transact.
For example, e-Naira agents can be found in areas where there are no banks. The agent will fund the wallet of people who do not have a bank account and who present their NIN-verified phone number to the agent.
Money from one wallet to another can be transferred with the help of a USSD number.
5. What is the value of an e-naira in today's money?
The e-Naira will be pegged to the Naira, so that their value will be the same as stable coins pegged to the dollar in the same way that they are now.
Stablecoins are a type of cryptocurrency that is linked to an asset, such as the United States dollar, whose value does not fluctuate significantly. Concerns have been raised about the e-Naira being linked to the Naira, given the Naira's inability to maintain stability.
In Conclusion
Overall, the concept appears to be quite comprehensive, and if successfully implemented, it has the potential to bring about significant changes in the nation's economic sector. There are some obstacles to overcome, such as data privacy and government monitoring, but the full extent of these obstacles is yet to be determined.
All parties will have to wait until the launch to find out what works and what doesn't, as well as how it can be improved in its overall design and functionality.
Although the e-Naira will be supported by the government, it will be hampered by some of the country's current problems, such as widespread illiteracy and lack of electricity, a lack of internet coverage, and the volatility of the Nigerian currency.
