Cypher
Central Bank Digital CurrenciesCryptocurrencyCryptocurrency RegulationNews

Nigeria’s Apex Bank Reveals Recommendations for CBDC Initiative

Sequel to an announcement in June, the Central Bank of Nigeria has released operating recommendations for its imminent central bank digital currency (CBDC) or a digital naira. As per the apex bank, the CBDC, already termed the e-Naira will offer the same value and will bear no interest at all. The trial for the e-naira is set to begin by October.

Nigeria’s apex bank had released a report containing the recommendations to commercial banks within the country. Listed in the report are also several forms the e-naira is due to take. The digital currency will be backed by the fiat naira. The Central bank of Nigeria has tagged the CBDC initiative, ‘Project Giant.’ According to the recommendations, the apex bank will also be responsible for the issuance, distribution and conversion of the e-naira amid other supervisory and regulatory responsibilities. 

E-Naira to Operate in Tiers 

Nigeria’s e-naira will operate under a categorized framework featuring Anti-money Laundering and Know Your Customer recommendations including various transaction restrictions. At the lower level of the tiered framework, citizens without accounts in banks are covered and will be required to submit their national identification number (NIN) and restricted to a minimum transaction of N50,000, about $120 in USD in a day. 

📰 Also read:  Southeast Asia Bolsters Groundwork Towards Blockchain and Crypto Hub

Moreover, Nigerians with accounts are covered under category 2 and 3, determined by the degree of completion on the AML/KYC requirements. For these categories, there will be a minimum limit of 200k ($487) and 1 million Naira ($2,438), each for transactions conducted in a day. Users on tier 3 will fulfill a physical verification and BVN requirements required for the second category. 

Cypher

Merchant users will have the same 1 million Naira limit as those under the third category. However, there are no limits to the amounts that can be sent to their bank accounts, the document provides. The document also outlines a no-fee structure for transactions to and fro digital wallets for the e-naira and bank accounts. According to the CBN, this is geared towards encouraging a mass adoption of the proposed e-naira amid pressing challenges of the mobile and digital payments system in the country. 

Nigeria Joins CBDC Race Alongside China, Canada

The latest issuance of operating recommendations for the CBDC is an indication that the West African country is taking active steps in seeing to it that the e-naira trial program begins by October. Following a global interest in CBDCs, especially in countries like China, Canada, Nigeria aims to join the frenzy in a bid to match the adoption rate of cryptocurrencies. 

📰 Also read:  Tokenized Art And Fractionalized Real Estate: All You Need To Know

Earlier in March, the CBN had placed a ban on crypto trading warning citizens of the risks involved in the usage of the asset class. Later in April, the bank reversed the ban, but most crypto traders in the country had resorted to P2P trading. As the proposed pilot month draws near, it is unlikely that Nigerians will adopt e-naira owing to the transaction limit stipulated for each category.


Tokenhell produces content exposure for over 5,000 crypto companies and you can be one of them too! Contact at info@tokenhell.com if you have any questions. Cryptocurrencies are highly volatile, conduct your own research before making any investment decisions. Some of the posts on this website are guest posts or paid posts that are not written by Tokenhell authors (namely Crypto Cable , Sponsored Articles and Press Release content) and the views expressed in these types of posts do not reflect the views of this website. Tokenhell is not responsible for the content, accuracy, quality, advertising, products or any other content or banners (ad space) posted on the site. Read full terms and conditions / disclaimer.

📰 Also read:  How to Buy Bitcoin (BTC) in Dubai - A Complete Beginner's Guide

Cypher

Shelly Melancon (Switzerland)

Shelly is a cryptocurrency enthusiast from Switzerland, she bought her first crypto in 2015 when it was way less popular then it is today and since 2017 she has been writing about cryptocurrency for online news portals. Shelly is the newest addition to the Tokenhell team, she writes mostly news and reviews related articles , stay tuned to her posts to stay up to date with the crypto world.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close
Skip to content