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5 things you should know about CBN eNaira
The Federal Government of Nigeria through the Central Bank of Nigeria introduced a cryptocurrency called eNaira. Here are a few things to know about it.
The Federal Government of Nigeria through the Central Bank of Nigeria announced that it would be introducing a local or call it homegrown cryptocurrency called eNaira.
What is eNaira? — eNaira is a CB -issued digital currency that provides a unique form of money denominated in Naira.
Prior to the launching of eNaira on October 1, the apex bank’s eNaira website has gone live ahead of the official launch.
Many people applauded the FG for taking this step especially when other countries like India, China, South Africa, Ghana etc have also decided on a home-grown digital currency.
Nigeria should not “carry last” as we say in our local parlance. Recall that CBN banned the use of cryptocurrency because it is not being issued by a Sovereign Authority, among other reasons.
Below are few things you should know about eNaira:
1. Easy Transactions
2. Cashless Policy
According to the CBN, the eNaira will aid financial inclusion and propel a cashless policy. The digital currency which was created to facilitate digital transactions does not need to be backed with physical cash.
3. It Grows in Value
It will not grow in value like Bitcoin or other cryptocurrencies but it will function the same way the Naira does. The eNaira will be pegged to the Naira so their value remains the same as stable coins pegged to the dollar.
4. Use of Wallets
The eNaira 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.
5. Secure Legal Tender
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 eNaira 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.
You may want to check out how to buy eNaira, the CBN stablecoin.
Conclusion
While some people have questioned the rationale for such introduction and the value to the economy, others have simply concluded that it is a project that will fill the void of inaction, giving the government a sense of psychological satisfaction.
Recall that before October 2020, cryptocurrency trading had become rife and pervasive. It became the first choice investment channel for mostly the youths (and few adults too).
The United States of America was the only country ranked ahead of Nigeria in cryptocurrency trading.
An unstable currency and a high remittance activity. Top government officials, finance experts and notable businessmen were rumoured to have taken a significant position in cryptocurrency. The industry boomed and the people prospered.