The CBN, like other Central Banks globally, has commenced preparation for the issuance and operation of Central Bank-issued Digital Currency (CBDC). This project is driven by a collaboration between the CBN and its technical partner, Bitt. Inc.

What are CBDC?

A CBDC is a digi­tal representation of a fiat currency, denominated in an existing unit of account, which serves both as a medium of exchange and a store of value. Most existing CBDC plans envision improved pay­ment efficiency (including new monetary policy transmission channels), financial inclusion, safety, privacy and compliance.

What is the timeline for issuing CBDC by CBN?

Following CBN's decision to implement the CBDC, it put in place a 4 phased roadmap that would lead up to the Pilot launch of the eNaira on October 1, 2021. The phases involved the assessment of the project, designing the eNaira architecture and acquiring the technological resources and skills, customization of the eNaira in line with the objective, training and onboarding of financial institution, consumer awareness programs and the roll-out of the eNaira through authorized payment services facilitators. On 1st of October 2021, the pilot launch of the eNaira would take place.

Which Geographical Location Would Have Access to the eNaira Pilot Launch?

The system would be rolled out in Port-Harcourt, Abuja, Kano and Lagos.

How Would the eNaira Roll-out and Transaction Activities be Secured?

The digital platform of the CBDC will be onboarded using strict Anti-Money Laundering/Combating the Financing of Terrorism regulatory standards as its KYC models. It will leverage on the banks' existing customers legacy KYC infrastructure.

Operations/Stakeholders of the eNaira

The operating model stakeholders would include:

Monetary Authority (Central Banks) with responsibilities to issue, distribute, redeem and destroy digital currency. The CBN would maintain control and security of eNaira minting, store data on secure cloud server and also monitor and analyse currency transactions.

Licensed Financial Institutions and Government Agencies would be able to request for CBDC currency/issue stablecoins, manage digital currency across its branches, perform authentication and KYC procedures,

Government Ministries, Departments and Agencies (MDA) would process digital payments sent and received from citizens and businesses, analyse transactions and reconcile accounts.

Businesses and Merchants would provide low-cost solutions to manage payments, offer POS, remote and online payments

Banked Consumers and Unbanked Consumers would have access to a simple user experience platform, expandable architecture to facilitate innovation and advanced privacy and security features.

What are the Consumer Wallet KYC and Transaction Structure?

Tier 1 are consumers with no existing bank account, with a daily transaction and balance limit of N50,000 and N300,000 respectively, the KYC requirement is validation of telephone number using NIN.

Tier 2 are consumers with existing bank account, with transaction and balance limit of N200,000 and N500,000 respectively, the KYC requirement is validation of BVN.

Tier 3 are also consumers with existing bank account, with transaction and balance limit of N1,000,000 and N5,000,000, the validation requirement is also BVN. Although existing MMOs authenticators would be required to conduct physical verification and comply with all KYC procedures provided under the CBN Anti-Money Laundering and Combating the Financing of Terrorism Regulations, 2013.

Merchants would have a daily transaction send and receive limit of N1,000,000 and N5,000,000 respectively with an uncapped daily balance limit. Their KYC procedures remain the same as stated in the CBN AML/CFT regulations.

Cost Benefits and Incentives of the eNaira

Upon the roll-out of the eNaira platform, it is expected that there would be no eNaira Merchant transaction costs on the platform as opposed to the current cost of e-transactions. Similarly, there would be no e-transactions costs for consumers when they make platform wallet to merchant transactions or platform to platform transactions.

What is the eNaira Onboarding Process?

Prior to the customer's onboarding process, Banks are to send invitations to its customers to register for the eNaira; a special code is then sent to selected customers for the validation of the eNaira wallet

  • Customer downloads the eNaira speed wallet
  • Customer enters invitation code sent by its Bank; the CBN Digital Currency Management System (DCMS) system validates the code
  • If code is valid, customer is required to enter its BVN, Date of Birth, TIN and the DCMS validates this information through its integration with NIBSS and FIRS
  • If information is valid, the system creates the customers eNaira wallet and activates it.
  • A notification is sent to the customer as well as the FI of the eNaira wallet activation.

How Would the eNaira be Circulated?

eNaira transaction Process for FI: Financial Institutions (FI) can request/uptake eNaira

  • FI logs into its eNaira platform and generates OID; the CBN through its Real Time Gross Settlement System (RTGS) uses the OID generated to request for a sum of the eNaira
  • CBN reviews, approves, mints, then transfers the eNaira from its Stock Wallet to the FI's Treasury Wallet
  • The FI receives a transaction notification on its treasury wallet

Financial Institutions request to return eNaira

  • FI logs into its eNaira platform; requests to return eNaira
  • The CBN through its Digital Currency Management System (DCMS) credits the FI's current account, debits its eNaira's Currency in Circulation (CIC) and transfers eNaira from the FI's Treasury Wallet to the CBN's stock wallet


eNaira Transaction Processes and Lifecycle 

  1. An e-wallet holder can initiate eNaira transfers to another e-wallet holder using the eNaira wallet
  2. Topping-Up the eNaira Wallet: the eNaira wallet platforms allows for a consumer to credit its eNaira wallet from consumer's bank account app (the consumer's bank could be either the same as its eNaira Wallet's bank or a different bank). Credit is also permitted on the eNaira Wallet from a 3rd party's account
  3. Cashing out from the eNaira Wallet: Customers are allowed to cash out;
  • From their eNaira wallet to its cash account within the same bank or its account in another bank and from its eNaira wallet to another consumer's bank account within the same or in a different bank
  • However, eNaira transfers for Naira cash withdrawals from a FI is not allowed: it is still unclear why this limitation exists considering that although it is expected to be a digital alternative for cash, a global feature is that it continuously operates both online and offline.

What are Other eNaira Use Cases?

  1. Merchants eNaira onboarding process is the same with individual customer onboarding process as stated above. There are no infrastructures for corporate account yet such as multiple signatories.
  2. Transactions involving a merchant include person to merchant/business (P2B); merchant/business to person (B2P). Transfer of eNaira to merchant for cash hand over is not allowed.
  3. eNaira wallet holders can handover cash to verification agents including banks and merchants for the eNaira equivalent.
  4. Government ministries, departments and agencies (MDA) also have access to the eNaira wallet. For this purpose, the MDAs are also to onboard to the e-Naira wallet.
  5. MDA downloads the eNaira speed wallet and logs in with its MD code. It enters its TSA/T24 account onto the platform and the system validates the account.
  6. International Money Transfer Operators (IMTO) also receive the eNaira for their customers through varying alternative such as partnering with a local bank, prefunded eNaira account and guarantees from local banks.

What are the Roles of Banks in Facilitating the eNaira Project?

The Banks would facilitate the marketing and promotion of the eNaira to existing and potential customers, provide onboarding and support services to customers, facilitate the distribution of the eNaira to customers and implementation of necessary integration channels for the efficient distribution of the eNaira. It would also ensure compliance with KYC and AML/CFT requirements.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.