CBN Adds New Feature to Yet-to-be-Launched eNaira - BUSINESS POST
By Sodeinde Temidayo David
The Central Bank of Nigeria (CBN) has announced that the yet-to-be-launched eNaira will have a new add-on that will enable users to complete transactions with mobile phones without Internet capability.
The apex bank, in a document titled Design paper for the eNaira, disclosed that maximising the value and use cases of the nation’s digital currency would depend largely on devices with Internet capabilities.
A few months ago, the CBN said it would launch eNaira on October 1, 2021, but it later suspended this without giving a new date for the unveiling.
This digital currency, which is expected to promote the cashless policy, is expected to become operational after the central bank stopped the trading of unregulated digital currencies in the country like Bitcoin, Ethereum and others.
The eNaira is to be introduced into the country under the Central Bank Digital Currency (CBDC), an electronic record or digital token of the local currency and is to be issued and regulated by the monetary authority.
Given the reason, the CBN noted that, “The eNaira thus risks further alienating sections of the population who are uneducated, lack exposure and access to internet services or digital devices.”
The apex bank is adding the new feature to the eNaira following a recent publication that estimated that 35 per cent or about 37.1 million of the nation’s adult population was illiterate.
To face the risk of losing adoption of the digital currency to this segment of the population, the CBN added that the bank has factored in the need for inclusiveness as part of the core design principle of the eNaira.
According to the central bank, this principle has enabled the bank to focus on simplicity and ease on the use of the e-Naira, to ensure that Nigerians without Internet-enabled phones can access the digital service.
The CBN said the eNaira would complement existing payment options available via the mobile banking apps, Point of Sale (POS) terminals, Unstructured Supplementary Service Data (USSD), quick response code and Internet banking, among other channels.
GSMA, a global industry organisation that represents the interests of mobile network operators, had said in a recent report that 19 per cent of people living in Nigeria do not have access to mobile broadband coverage.
In its design paper, the central bank, in a bid to ensure inclusive access while also ensuring the integrity of the financial system, has chosen the account-based CBDC model for the eNaira.
The CBN said, “The account-based CBDC model at its core mirrors the progress made on the National Financial Inclusion Strategy which enables access to financial services by leveraging last-mile networks to identify users and to provide banking services through channels such as PoS and USSD.
“With the account-based model, the CBN seeks to enable access by leveraging the existing identity infrastructure in Nigeria such as the BVN, NIN, TIN, etc., to uniquely identify individuals and corporate entities.
“Specifically, identity frameworks such as the NIN will enable access for the financially excluded as they can be uniquely identified, thereby enabling the provision of financial services. These identity systems will help ensure a robust KYC framework positioned to enable access for all Nigerians.”
The CBN also added that this would help improve cross-border payments and address issues of dollarisation of the economy, as it could be recalled that Visa, a payments company, recently noted that the ease of operating CBDCs would determine the success of digital currencies.