Nigerian deposit money banks (DMBs) are set to market and promote the adoption of eNaira as a digital version of cash to existing and potential customers in support of the financial inclusion objective of the Central Bank of Nigeria (CBN).
The Nigerian apex bank has recently come up with the idea of a Central Bank Digital Currency (CBDC), a digital token that represents the virtual form of a fiat currency of a particular monetary authority. A CBDC is centralized; it is issued and regulated by the competent monetary authority of the country.
According to a presentation to banks on the eNaira entitled ‘Project GAINT’ cited by LEADERSHIP Sunday, the CBN plans to commence the pilot project of the eNaira on October 1 this year.
The apex bank is working on the eNaira, an account-based wallet as a legal tender with parity of value. It will be a tier two retail CBDC model, value-based with transaction limit for customers. The eNaira will be instilled with anti-money laundering and know-your-customer (AML/KYC) approach (NIN, BVN as unique identifiers).
According to the CBN document, “the eNaira will be a non-Interest bearing CBDC with settlement finality. Banks would facilitate user onboarding and provide world-class customer support service that would catalyze the adoption of eNaira.
“Banks would uptake and distribute eNaira to Nigerians a digital version of cash. Banks to implement necessary integrations for efficient distribution of eNaira through new and existing channels. Banks would ensure compliance to KYC and AML/CFT requirements for all users and transactions involving eNaira.
eNaira is being designed such that people can easily fund their wallets using their existing accounts with the Banks. The eNaira platform will integrate with all banks via NIBSS for the October Pilot go live.
eNaira transactions will ride on both new and existing rails. The central switch is one of the existing arrangements eNaira would leverage on. CBN will create a platform where innovation can thrive. Interbank transactions involving bank accounts will go through the central switch as is today.
The corporate will be able to use the same out-of-the-box wallet as individuals pending when the bank can enable their own wallets to meet different customer needs such as multisig wallet for corporate.
Financial institutions will play a critical role in validating their customers. Infact, for the Pilot phase, only Customers with a code assigned to them by their Banks will be onboarded. These are Customers that have already been validated and KYCed by the Bank.
According to the CBN document, the eNaira system has been designed and integrated with one of the best fraud management system available today.
– Leadership