Have you heard about the e-naira ? 🤔
Are you aware that Nigeria is set to launch her own digital currency, through the Central bank of Nigeria (CBN) ? ✨
Or you do not have any idea of what the e-naira is all about ? 😅
Okay, it’s fine,
Let me walk you through some basic information you need to know about the e-naira in four minutes… 🤗
The e-naira is a ‘digital curren c y’ issued by the Central Bank of Nigeria that provides a unique form of money denominated in Naira.(In simpler terms, a digital version of the physical/paper-naira money).
With the increase usage and popularity of cryptocurrency like Bitcoin, XRP, Doge e.t.c amongst individuals and companies as a means of exchange, store of value and investment to grow fortune, Governments around the world have begun to embark on producing digital currency and Nigeria as a nation isn’t left behind.
The e-naira would be a digital representation of the paper (#) currency.It would be a complementary legal tender in Nigeria whilst having the same exchange value as the paper naira and also maintain the same exchange rate with naira-dollar.
FEATURES OF THE e-NAIRA
• Does not yield interest : Unlike cryptocurrency, the e-naira which is a digital currency does not increase in value and would not yield interest.It is not an investment to grow fortune.
• It would be exchanged via peer to peer (P2P): Transactions would be carried out between two individuals/two parties with the e-naira wallet.
(One party offers/sell then the other party accepts/buy).
• Universality : Anybody, anywhere can hold/have the e-naira.Unlike the paper naira, the e-naira can be held by anybody since it’s digital.
• Cross Border transactions : The e-naira can be used as a means of exchange between merchants in different countries.A Nigerian freelancer can receive e-naira as a payment in exchange of the value rendered to his client outside Nigeria.
• The e-naira wallet would not be connected to your already existing bank accounts.
• You can monitor your wallet activities : The e-naira transactions can be carried out through a USSD or the e-naira app.
• The e-naira can also be used for remittance.
• Serves as a medium of exchange and store of value.
•It would be used for local and international trades.
ADVANTAGES
1.
Better payment prospects in retail transactions than cash.
2.It is said to be cheaper for diaspora remittance: The e-naira, if used by individuals in sending and receiving dollar-naira equivalent, would be cheaper than that of the regular and usual means of carrying out remittance transactions.
3.Improves payments processing : Payments can be made through QR codes, USSD, e-naira app.
4.
Improves financial inclusion : Persons without a bank account can carry out online transactions.
5.Cross border trades : The e-naira would be used as a means of exchange between merchants in different nations of the world since it has a ‘universality’ feature.It is still unclear how this would work but it has been said that it would have a positive impact on Nigeria’s economy.
6.It might also improve tax collection by the government.
7.The e-naira is said to have a fast transaction processing mode.
8.Cheap : The e-naira has also been said to be a cheap means of transaction as it would not include transaction charges, this being for the users.
It would also reduce costs of logistics in printing and transporting paper money, For the government/CBN
9.It allows the government to control and reduce Money Laundering through it’s Anti-Money Laundering modalities put in place on the e-naira.
10.Traceable : Transactions on the e-naira wallet can be traced unlike cryptocurrency wallet which makes it easier to control fraudulent activities by potential perpetrators of this act.
DISADVANTAGES
1.Control by the CBN: Control of the e-naira by the Central Bank of Nigeria might raise some kind of competition between financial institutions in the country and CBN.
Though this seems to be just at the initial stage.
2.Centralised power : The e-naira is being controlled by the CBN (well, maybe just at the initial stage), which means they can do and undo, just as they stopped Nigerian Banks from getting engaged in crypto currency and got the funds of many Individuals stocked up in crypto wallets and leaving them stranded, before P2P solutions came into play on the long run.
3.Data Protection : (In one of my next write ups, I will talk about the company involved in helping the CBN build the e-naira)
The e-naira platform is being built by a private company, which means the data of e-naira users would be in the hands of the government- CBN and this private company- Bitt Inc.Remember that the CBN already has your BVN information as well.
4.
Security Concerns : In Nigeria, people are so skeptical when it comes to digital transactions, the fear of waking up the next day to hear that the system has been hacked seems to be a disadvantage…Well, I am sure the CBN has their way around this already.
“The e-naira; Lower costs, high productivity”.
Lest I forget, the e-naira is set to launch tomorrow (1st October, 2021)
Thanks for reading through, I hope I have been able to help increase your knowledge about the e-naira.You can drop your questions, observations and views about the e-naira in the comment section.
Cheers guys 🥂
– Timi Joel
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