eNaira Will Boost Cross-Border Trade – CBN

Rakiya Mohammed, CBN director of information technology has explained the economic implications and importance of a centralised and regulated digital currency in the country.

Last month, the CBN said it would launch the pilot scheme of its digital currency, eNaira, by October 1, 2021, with a Barbados-based fintech firm, Bitt Inc. as its technical partner.

The apex bank also said eNaira must be accepted as a form of payment by all merchants and business outlets.

Mohammed, while speaking virtually at the third-quarter industry forum of the committee of e-business industry in Abuja on Wednesday said: “If people adopt more of the usage of the eNaira, then we will be able to have more data to formulate better macroeconomic policies,”

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“And when countries come on board and create their own digital currencies then we will be able to have a faster exchange of currencies, and therefore we might be able to boost cross-border trade at a much lower cost.

“Of course, payment efficiency, even though we know that Nigeria has one of the best payment systems in the world, we will still be able to improve on that.

“We believe that the eNaira will be a catalyst for digital economy because the people who are outside the formal banking sector will be integrated.”

On the eNaira design, she said: “In terms of the eNaira design, it will be a legal tender just like cash which is one of the fundamental differences between it and the cryptocurrency,”

“One, eNira will be equal to one fiat naira, and we adopted a two-tier retail model that would be a lot less disruption into the financial system.

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“Our banks, payment service providers, and fintech are all going to be on board and we are going to key to the infrastructure they have already and incorporate the new system.

“It is not meant to replace the cash we have, but only to supplement.

On the anonymity of transactions, she said: “It would be value based which means that we will see the amount of money changing hands without necessarily seeing who is behind the transactions so anonymity is complete and absolute.

“This will allow us to be able to conduct their AML/KYC operations. It is going to be non-interest bearing at least for now.”