In keeping with its cashless policy, the Central Bank of Nigeria CBN on the 25th of October,2021 issued a set of bold guidelines governing the use of the E-Naira & signifying Nigeria’s leap into the digital currency space.
The E-Naira Guidelines were made pursuant to the Central Bank of Nigeria CBN Act of 2007 and is the latest addition to Nigeria’s legal tender portfolio, representing one of the first examples of digital fiat currency in Africa.
This article will be looking at the notable provisions of the regulatory framework governing the E-Naira, especially the following :-
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- The legal qualities of the E-Naira.
- The objectives of the E-Naira system.
- The E-Naira delivery platform and system components.
- Transaction adaptability and limits of the E-Naira.
What are the objectives of the E-Naira currency system?
The objectives of the E-Naira are :-
– To complement physical cash as a less expensive, more efficient, safe, generally acceptable & trusted means of payment/store of value.
– The improvement if monetary policy effectiveness.
– The enabling of the government’s capacity to deploy targeted social interventions.
– The provision of cheaper alternative channels for government revenue collection & the boosting of remittances through formal electronic channels.
What is the applicability scope of the CBN E-Naira Guidelines?
These guidelines are applicable to all Financial Institutions and users of the E-Naira.
Is the E-Naira a Cryptocurrency?
No, the E-Naira in the strictest sense is not a Cryptocurrency which defines decentralized Blockchain-backed representations of value, but it is a Digital currency and specifically, a Digital adaptation of Fiat currency, which makes it closer to a Stablecoin it Digital fiat.
What are the components of the E-Naira delivery platform?
The components of the E-Naira delivery platform are :-
- The Digital Currency Management System (DCMS) :- For the purpose of minting and issuing E-Naira.
- The FI (Financial Institutions) Suite :- This is the primary app used by FIs to manage their digital currency holdings, requests and redemptions.
- E-Naira wallets :- For end-user transaction purposes.
- The E-Naira stock wallet :- This belongs solely to the CBN and it is for the purpose of warehousing all minted E-Naira.
- E-Naira Treasury wallets :- To be maintained by an FI to warehouse E-Naira received from the CBN E-Naira stock wallet.
- E-Naira branch wallets :- which may be created by an FI for its branches and which shall be funded from the treasury E-Naira wallet.
- The E-Naira merchant speed wallet :- This is used only for receiving and making E-Naira payments for goods and services.
- E-Naira Speed wallets :- This is for End-users to transact on the E-Naira platform.
Who are the recognized participants in the E-Naira system under the CBN Guidelines?
The participants in the E-Naira system are :-
- The CBN :- Which has the functions of minting, issuing, distributing, redeeming and when necessary destroying the E-Naira as well as monitoring compliance with applicable regulations.
- FIs(Financial Institutions) :- Which stand as Intermediaries between the CBN and customers as well as facilitating E-Naira Speed wallet onboarding for Bank customers and integrating the E-Naira Speed wallet feature into their electronic banking channels.
- Merchants :- With the role of providing customers with alternative channels for making transactions using E-Naira and providing cash-back services for customers.
- Consumers :- Who have the role of creating and funding E-Naira Speed wallets as an alternative transaction settlement option.
What are the types of E-Naira consumer transactions permissible under the CBN Guidelines?
The following consumer transactions are permissible under the CBN Guidelines :-
- P2P (Person to Person) transactions.
- P2B/B2P(Person to Business/Business to Person) transactions.
- P2G/G2P (Person to Government/Government to Person) transactions.
- Cash or Bank account to E-Naira Speed wallets.
- E-Naira Speed wallets to cash or Bank accounts.
Are there transaction limits on the E-Naira?
Yes there are, but these limitations are on a category basis. The E-Naira transaction limit categories are:-
– The Tier 0 category
Daily Transaction limit – 20,000.00 Naira
Speed wallet limit – 120,000.00 Naira
– The Tier 1 category
Daily Transaction limit – 50,000.00 Naira
Speed wallet limit- 300,000.00 Naira
– The Tier 2 category
Daily Transaction limit – 200,000.00 Naira
Speed wallet limit – 500,000.00 Naira
– The Tier 3 category
Daily Transaction limit – 1 Million Naira
Speed wallet limit – 5 Million Naira
– The Merchant category
Daily Transaction limit – No limit
Speed wallet limit – No limit
How are consumer complaints and disputes arising from the E-Naira resolved?
Consumer complaints from E-Naira issues should first be directed to the help desk of the FI where a speed wallet is domiciled to be resolved within a 48-hour timeframe before being escalated to the Central Bank of Nigeria.