After Ghana, Nigeria is the next African nation to reveal CBDC plans, issues guidelines

Africa is witnessing a constantly increasing interest cryptocurrencies. Many regions such as Nigeria and Ghana saw major circulation numbers lately. Well, this marks a reducing dependence on inflationary traditional assets.

In a latest development, The Central Bank of Nigeria (CBN) has issued preliminary guidelines for its proposed eNaira digital currency. As per a report by Nairametrics, the new revelations concerning e-naira’s design as well as the operational module were recently sent to banks by the CBN. Nigeria’s CBDC is codenamed “Project Giant” and will be pegged to the value of the naira.

Ergo, it will have non-interest-bearing CBDC status, a transaction limit for customers, and a value-based transaction limit. Thus, giving it a legal tender status.

Here’s the main crux of the CBDC guidelines in order, which is to be a five-stage launch:

1. Monetary Authority Suite: The Central Bank will be handing the aspects relating to issuance, distribution, redeeming and destroying the currency, among others.
2. Financial Institution Suite: Licensed financial institutions will be able to issue stablecoins, manage digital currency across branches, look into KYC, AML compliance capabilities and so on.
3. eGovernment Suite: The government will be able to efficiently process digital payments sent to and received from citizens and businesses.
4. Merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis, and reconciliation.
5. Retail Consumer Suite features user-centered designs for a great user experience, as well as advanced privacy and security, among others.

CBN plans to ensure seamless transfers between eNaira wallets and bank accounts with no fees for several types of transactions. In addition to this, the authority also laid down its plans to launch a wallet for its digital currency. This wallet will enable the CBN to meet its goal of launching the e-naira by October 1, 2021.

Other regions portrayed similar optimism towards the incorporation of CBDCs. For instance, as reported before, the Bank of Ghana (BoG) took steps to pilot a CBDC. Meanwhile, other regions outside Africa have also been working toward coming with the digital versions of their respective currencies. Recently, the Monetary Authority of Singapore (MAS) shortlisted 15 “Global CBDC Challenge” participants to help build an in-house retail CBDC.