Chimara Bygold
The Central Bank of Nigeria (CBN) has published the eNaira Design Paper, which gives much more detail on the critical dimensions of the eNaira, including its design and architecture, the initial eNaira functionality and what roles different economic actors play as the eNaira is introduced.
It also details the risks of the eNaira and how they will be mitigated, as well as the eNaira Implementation roadmap.
These critical details according to the apex bank, should give comfort to Nigerians that the eNaira has been well-conceived and the launch of the eNaira has been robustly planned.
The CBN began its Central Bank Digital Currency (CBDC) journey in 2017, with extensive study, consultations, identification of use cases and the testing of the CBDC concept in a Sandbox environment.
Based on this preliminary work, the CBN is now ready to launch Nigeria’s CBDC – the eNaira.
It said the eNaira is the digital equivalent of the cash Naira. Put simply, “the same Naira, more possibilities.”
According to the design paper, the eNaira – like the physical Naira – is the official tender of Nigeria and is a liability of the CBN and will always be exchanged with Naira 1:1.
“The CBN believes the eNaira will make a significant positive difference to Nigeria and Nigerians, including:
Improving the availability and usability of Central Bank money;
Supporting a resilient payment system ecosystem; Encouraging financial inclusion; Reducing the cost of processing cash; Enabling direct welfare disbursements to citizens;
Increasing revenue and tax collection;Facilitating Diaspora remittances; Reducing the cost and improving the efficiency of cross-border payments
“In introducing the eNaira, the CBN has given careful consideration to the entire payments and financial system ecosystems and has designed the eNaira and the development of the eNaira over time to complement and strengthen these ecosystems.
“While the launch of the eNaira is an important event, it is one milestone on a long journey.
The eNaira is a process, not a single step. Over time, the CBN believes the robust ecosystems that will be built on the eNaira platform will ensure Nigeria and Nigerians receive all the benefits from the eNaira.
Central banks play an essential role in the economy by providing a robust, safe, efficient, and inclusive payment system.
They provide monetary and financial stability as well as the safest form of money to the populace – Central Bank Money. As technology evolves and advances, it is critical that Central Banks also evolve to continue to play their role and Central Bank Money adapts to take advantage of these opportunities provided by new technologies.
Today is one of those moments where new technology offers the central bank an enormous opportunity to play its role even better, thereby improving the society and economy of their nation.
