What is eNaira and how does it work? | CBN digital naira

What is eNaira?

What is eNaira and how does it work? | CBN digital naira

eNaira is a CBDC (central bank digital currency) developed by the central bank of Nigeria as a digital version of the physical naira fiat currency, simple as that. Unlike the physical naira, eNaira will be used electronically across bank apps and other accredited payment systems in Nigeria.

The idea of eNaira was initiated subsequent to the Endsars protest in 2020 when a lot of sponsored contributed to the protest using cryptocurrencies like bitcoin, ethereum, and usdt. These transactions were made over the blockchain network which made them untraceable over the internet, after this, a ban was placed on all crypto transactions across the nation, and the idea of creating digital naira came into place.

eNaira will function under a layered anti-money laundering and know your customer (KYC) framework with a limit to your daily transaction just like it was with the commercial banks. Users that have fulfilled their KYC and AML verifications will have daily transaction limits of  ₦200k and ₦1 million respectively.

How does eNaira work?

  • You can receive enaira as payment
  • use it for payment
  • for peer to peer transactions over the internet
  • payment for utility bills
  • cross-border transactions
  • store of value
  • easy to access anywhere, anytime using the internet
  • not mineable by private individuals or company
  • can only be mined/printed by the CBN just like fiat
  • will be regulated by the CBN of course
  • enaira is a non-interest bearing assets 

Will e-Naira be available on crypto exchanges?

As of this moment, it's uncertain if the ban on cryptos will be lifted after the successful launch of e-naira, but if the ban still holds, then the chances of enaira being available on crypto exchanges are very slim. on the contrary, if the ban is lifted, e-naira might be a payment and withdrawal option for Nigerians to fund and defund their crypto accounts using payment systems like flutter wave.

Can you invest in eNaira?

eNaira is a non-interest-bearing asset which means that you stand no chance of making a profit from buying and keeping it as the value is stable and doesn't increase nor decrease as a currency except against other currencies like the US dollar. so in other words, eNaira can be used as a store of value and not specifically an investment or interest-bearing asset.

Will eNaira affect bitcoin in Nigeria?

First of all, bitcoin can not be significantly affected by any government policy whether in Nigeria or any other country.  Bitcoin is global and borderless hence it can not be stopped or affected except if the internet is shut down and neither can eNaira negatively affect bitcoin to a large degree, instead it would aid bitcoin and other crypto transactions in Nigeria. 
Nevertheless, using eNaira for a direct crypto transaction will put your transaction at risk of being traced and or censored, so be careful to use eNaira wisely and legally on the off chance that it can be used for crypto purchase.

How to use eNaira

To use eNaira, users will need to download Speed wallet and validate their wallet either by using a phone number, bank verification, or national identity number. once done, users will be able to do peer-to-peer transactions, make payments to merchants who have an enaira wallet.
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