Read more: Nigeria’s Central Bank Preps for Launch of eNaira Digital Currency
Last month, the Central Bank of Nigeria (CBN) sent a document to local banks detailing the design of its soon-to-be launched virtual currency, with information on the roles assigned to participants involved in the currency rollout.
See more: Nigeria’s Central Bank Announces Plans to Launch Digital Currency
The CBDC will have a legal tender and non-interest-bearing asset status, with both customer and value-based transactions capped at a certain limit.
According to information provided on the eNaira website, the digital currency’s “functionality delivers speedy, safe, and simple trading and transactional opportunities to customers and end-users.”
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Four core features of the eNaira are listed on the website, including a unified payment system allowing customers to easily move money from their bank account to their eNaira wallet; a bank account management system through which customers can monitor their eNaira wallet; a contactless payment feature that users can employ to make in-store purchases; and peer-to-peer payment feature allowing funds transfer through a linked bank account or card.
In general, CBDCs can cut the costs of cross-border payments in half while significantly reducing the time needed for cross-border payments to clear.
Read more: Central Bank Digital Currencies Can Cut Cross-Border Transaction Time
That could be why interest in CBDCs is rising rapidly around the world. A Bank of International Settlements (BIS) poll of central banks determined that close to 86% of respondents are looking into the possibility of launching CBDCs, while 60% were trying out the technology and 14% were undertaking trial projects.
In addition to speeding up cross-border payments and making them less expensive, CBDCs could increase financial inclusion.
