Central Bank of Nigeria (CBN) Issues Guidelines for e-Naira As October 1st Launch Nears

As October 1 nears for the much anticipated e-Naira to be unveiled, the Central Bank of Nigeria (CBN) has started outlining guidelines for the digital currency. Nairametrics reported that the apex bank has sent a presentation to Nigerian banks about the e-Naira project, revealing more details about its design and operational module. The apex bank has also hired a technical partner, Bitt Inc.

According to the report, the Central Bank Digital Currency (CBDC) status of the e-Naira makes it a legal tender as it serves the same purpose as the fiat. However, the rules as outlined by the CBN separates them in some ways.

The report states that the e-Naira is a legal tender for the entire country and it will have non-interest-bearing CBDC status, a transaction limit for customers, and a value-based transaction limit.

Participants in the e-Naira program are featured in five stages, including:

Monetary Authority Suite: The Central Bank will be handing the first product component that includes issue, distribute, redeem and destroy the currency. Store data on a cloud server, monitor and analyze currency transactions.

Financial Institution Suite: licensed financial institution will be able to request currency or issue stablecoins, manage digital currency across branches, KYC, identify and AML compliance capability.

e-Government Suite: the government will be able to efficiently process digital payments sent to and received from citizens and businesses.

Merchants Suite: Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation.

Retail Consumer Suite: features user-centered designs for a great user experience. The architecture will be expandable to enable innovation; features advanced privacy and security.

Besides these, the CBN also outlined the proposed transaction cost for the e-Naira wallet.

The report highlighted other regulatory guidelines including that the digital currency infrastructure does not charge for user-to-merchant transactions and P2P wallet transactions.

Also, that it shall be the responsibility of Nigerian banks to promote and market the centrally issued digital currency as a cash alternative to existing and potential customers in support of the Nigerian apex bank’s goal for financial inclusion.

In order to catalyze the adoption of the e-Naira, banks will facilitate onboarding and provide world-class customer service.

Nigerian banks will be allowed to invite all their customers to register for the e-Naira. Besides pre-generated codes, the banks can send invitation codes for onboarding to a specific list of selected customers. Onboarding will be done for customers who have a code assigned by their banks. The banks have already validated and verified these customers.

The apex bank said the wallet provided by its institution was merely a stop-gap measure for meeting the deadline, given that banks and other licensed operators may provide their own wallets since it didn’t intend to compete against the banks, the report said.

And as part of the digital currency initiative, the NIBSS and other switching platforms will still be relevant, existing infrastructure can be integrated and leveraged in the e-Naira implementation.

Also, as a National Critical Infrastructure, the e-Naira system will be subject to comprehensive security checks, all data and personally identifiable information (PII) will be kept off the ledger and will not be stored on the ledger.

According to a further report by Nairametrics, the central bank announced three “Speed wallet” levels issued primarily to meet the October 1st deadline.

The wallet doesn’t compete with existing banks, but it stands in place whilst banks and other players create more wallets.

With the first tier, Speed Wallet can be used by anyone who does not have a bank account. However, users will have to submit a passport photo, a name, birth date and place, a phone number, and their address.

A fifty-thousand-naira limit is in place for Send & Receive, the minimum requirement is the individual’s National Identity Number (NIN), which will be validated. A cumulative balance of three hundred thousand naira is fixed each day.

For Tier Two Wallets, an account with an existing bank and Bank Verification Number (BVN) are the minimum requirement. The user is limited to sending and receiving two hundred thousand naira per day with a Cumulative Balance of half a million naira daily.

Tier three allows daily transactions of a million naira, with daily cumulative balances of five million naira. Just as tier two, the user requires at least a BVN.

Those who possess this merchant level can send or receive a million naira daily. The rules allow merchants to move as much money as they want into their bank accounts. However, the CBN notably did not make room for cryptocurrencies, affirming the stand it had taken on the digital assets earlier in the year.