The Central Bank of Nigeria (CBN) has issued guidelines for eNaira, its proposed digital currency to Nigerian banks.
The guidelines titled ‘Project Giant’ says that eNaira would be pegged to the value of the naira. This will ensure that the e-naira offers parity of value without being an interest-bearing currency.
The eNaira would run alongside the country’s fiat currency, and the CBN will be responsible for issuing, distributing, and redeeming the digital currency, in addition to other monitoring and management functions. Meanwhile, banks will promote and market the adoption and usage of the digital currency.
Furthermore, eNaira would operate within a tiered Anti-Money Laundering and Know Your Customer (AML/KYC) structure with different transaction limits.
The base of the AML/KYC pyramid will accommodate unbanked citizens who will be required to provide their national identity-linked phone numbers for verification. The daily transaction limit for users in this category is ₦50,000.
Users who own bank accounts fall under the second and third tiers depending on the number of AML/KYC steps completed. The daily limit for these levels is ₦200,000 ($487) and ₦1 million ($2,438), respectively.
To access the third tier, citizens will need to complete a physical AML/KYC verification process in addition to the bank verification required for lower tiers.
The CBN plans to ensure smooth transfers between e-naira wallets and bank accounts with no fees to encourage the adoption of the CBDC.
The document also offers process flows for International Money Transfer Operators (IMTO) and the proposed e-naira, highlighting plans to integrate the digital currency with the central bank’s forex control policies.
It might interest you to know that the CBN has recently accelerated moves to launch a cryptocurrency for Nigeria. This is happening despite stopping banks and other financial institutions from facilitating cryptocurrency transactions.