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eNaira token [how it works] Everything you need to know 2021,2022

eNaira token is created by CBN, to solve the problem of cashless use of money. Could this be the coin of the future for Nigerians? Will eNaira help the economy of Nigeria at least?

With 81 countries and more in the race to develop their own Central Bank Digital Currencies, let it be very clear that the Central Bank of Nigeria is not just another CBDC, they are a people-oriented digital currency leveraging technology to connect individuals and businesses for easy trading and financial inclusion.

They push the boundaries, bridge the gaps, and tell actual humane stories. They are the foremost audience-centric digital currency brandishing a face.

The Central Bank of Nigeria (CBN) is set to launch the eNaira on October the 1st. Let us take a closer look at the eNaira, what it means for you, and how you can position to take advantage of its launch.

What is the eNaira

enaira logo

The Naira is the currency of Nigeria. One naira is divided into 100 kobos. The Central Bank of Nigeria is the sole issuer of legal tender money throughout the Federal Republic of Nigeria. It controls the volume of money supply in the economy in order to ensure monetary and price stability.

The eNaira is the Nigerian digital currency that is issued and regulated by the Central Bank of Nigeria. Its functionality delivers speedy, safe, and simple trading and transactional opportunities to customers and end-users:

  • It is exchanged peer to peer.
  • It is universal – anybody can hold it.
  • It does not yield any interest
  • It is not a cryptocurrency

The e-Naira will be a digit representative of the paper Naira currency issued by the Central Bank of Nigeria.

The eNaira will be a “complementary” legal tender in Nigeria, having the same exchange value as the Naira, and maintain a “parity of value” with the Naira.

The e-Naira will not earn any interest to holders. The e-Naira is built on a blockchain open ledger technology.

eNaira is the digital form of cash and is a direct liability on the Central Bank of Nigeria while the customer deposits are direct liabilities on the financial institutions.

Features of eNaira

  • Unified Payment System: Customers can now move money from their bank account to their eNaira wallet with ease.
  • Contactless Payment: Customers can make in-store payment using their eNaira wallet by scanning QR codes.
  • Bank Account Management: Customers can monitor their eNaira wallet, check balances and view transaction history.
  • Peer to Peer Payment: Allows users to send money to one another through a linked bank account or card.
  • Sending and Recieving Money: Customers can now send and receive money faster, easily and at very minimal costs.
  • Verified Payments: Customers can verify their payments and look up their transaction history anytime, anywhere.
  • Foreign Exchange Transaction: Customers can enjoy speedy transactions across boundaries and a hitch-free foreign exchange.
  • Financial Institution Transaction: Intra/inter financial institutions transactions are not only possible, they are faster and cheaper.

Is the e-Naira a Stablecoin?

A stable coin is a cryptocurrency backed by reserves. The keyword is reserved, but what kind of reserves? Stable coins are backed by holding an equal equivalent of FIAT money like the US dollar.

FIAT means government-issued but usually not backed by any commodity, e.g., gold.

Thus a stable coin like USDT is tied to a currency, the US dollar, and maintains a stable exchange value. Note, stable, not immovable.

The eNaira technically is linked to the FIAT Naira, but is the Naira stable? Well, not exactly. To be a stable coin, the eNaira has to be tied to a currency like the US Dollar or Euro or even the Yuan.

How safe is the e-Naira?

Think of the e-Naira in this way; you want to send N100 to an uncle in a remote village without a bank branch. A common practice is to buy mobile phone recharge cards of that value, load them to your phone, and text your uncle.

Your uncle can then go to any phone card retailer and discount his N100 mobile phone credit for N95.

The mobile retailer can redeem the call credits and pay cash because he trusts the person doing the exchange; however, he cannot tell if the mobile numbers are real.

The eNaira is designed to solve this verification risk by assuring all holders that each eNaira is a valid token. This authenticity is achieved by building the eNaira on the blockchain.

Thus instead of buying phone credits, I will debit my bank account for N100, convert to eNaira, and transfer it to my uncle. My uncle can spend the funds directly from his phone or transfer and get cash.

Every retailer is more likely to accept the eNaira because it can’t be easily faked.

How will I get the eNaira?

You will be able to access eNaira via the eNaira wallet in app stores such as the Google Play Store and the Apple App Store.

You can also dial a USSD short code and follow the required steps to perform transactions

The CBN has planned a rollout in a tiered manner; first, it will issue the e-Naira, to financial institutions like banks. Your bank will then retail the e-Naira to you.

If your transaction value is less than N50,000 a day, you don’t need a bank account to get the eNaira; you can use a NIN verified phone number to buy eNaira.

If you want to withdraw more than N50,000 but up to the daily limit of N1 million, then you will need a BVN in addition to a NIN verified phone number.

The CBN has very strict ‘Know Your Customers” protocols for this process, the aim is to assure all retailers of the safety and utility of the eNaira.

It will circulate alongside cash. The eNaira will complement cash as a less costly, more efficient, generally accepted, safe, and trusted means of payment.

The Enaira Wallet

nigeria enaira

Nigeria eNaira wallet goes beyond an App, it is a companion for all transactions. At the core of the CBN, strategy sits a dire need to find the confluence between humanity and technology.

The enaira wallet is designed to respond to your needs and thrash your worries. Careful thoughts and analytics from real Nigerian situations and global realities were distilled into creating the eNaira wallet.

For them, the question is not ‘what can I do with my wallet?’ but ‘what can my wallet do for me?’

Why should I use the e-Naira?

The eNaira has a low-cost advantage when compared to FIAT. The daily transfers between accounts are at no cost to the holder of the account.

Lower transaction cost is a massive incentive as traders will pay no fees for withdrawals and deposits to and from their bank account.

No transaction fees reduce the cost of commerce while improving safety.

  • 99.9% service availability.
  • Low charges.
  • Nationwide acceptance.
  • No dispensing errors.
  • Advanced data privacy and secur

How will dollar remittance to e-Naira work?

The e-Naira will be integrated into the CBN’s forex process, and this is to make it easier to receive remittances to Nigeria. These transfers could be from the CBN crediting e-Naira directly to the International Money Transfer Organisation (IMTO).

A Nigerian abroad sending $100 to his uncle can debit his US bank account and credit $100 to an IMTO, who will buy eNaira from their corresponding Nigerian bank.

The $100 is converted to e-Naira instantly at a far lower transfer fee which is a real benefit and a significant advantage the e-Naira will enjoy.

What about inflation?

The street definition of inflation is too much cash chasing too few goods; however, not all inflation is this simple. Coins in Nigeria are scarce; thus, most merchants round up their prices to match with available currency, usually notes.

This rounding up induces an artificial rise in prices because any cost-push does not cause the price hike but other factors, for example, selling eggs for N100 instead of N88.

With the eNaira, it becomes possible to transfer the exact cash price in the marketplace, especially in rural areas. This reduces the possibility of “round-up inflation.”

The e-Naira can be the ECOWAS currency

The e-Naira can be used by any two parties who can credit a Nigerian banking institution with corresponding currency. This means a trader banking with UBA in Burkina Faso can settle his import bills from the Gambia using e-Naira.

This will be the next level of the rollout. The financial institutions and FINTECH start to build out an ecosystem with eNaira as the base product.

The e-Naira helps the financially excluded

The e-Naira will also bring in the vast majority of the unbanked Nigerians who have no bank account but have a phone in the formal financial economy.

With the e-Naira, salary payments and payments for goods and services can be concluded. A plumber can accept payments on his phone, store them in his wallet, and make transactions with any vendor.

Check this Out –> The most successful Forex Traders in Nigeria

What are the risks?

Data security. The e-Naira is online, the BVN and NIN information is also online, the risk of malicious actors attempting to hack or gain access to the data is very low. The process of minting and burning eNaira tokens by the CBN has to be top-notch.

Overall, it’s a plus to the Nigerian economy, and it’s a positive progression towards a cashless society, with lower costs, and higher productivity.

eNaira is safe and secured with cryptographic techniques against counterfeiting, cloning, and other forms of attack.

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What do you think about eNaira Token? Do you think it is worth all the publicity it is getting or it should not be used?

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