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Fintech - October 29, 2021

How is the Nigerian E-naira Different From Money in Your Bank Account?

The eNaira is meant to serve as a cheaper, more efficient, widely accepted, safe, and trustworthy alternative to the traditional Naira.

The Nigerian Central Bank Digital Currency(CBDC), eNaira, was launched on Monday the 25th of Octobere by the nation’s  President, Mohammed Buhari in the State House.

Following the launch, the Central Bank of Nigeria’s (CBN) governor, Godwin Emefiele, said that N500 million’s worth of eNaira has already been minted. The CBDC was created by fintech company Bitt in the Caribbeans. 

The eNaira wallet app which is the official store for the digital currency was removed from the Google Playstore just 48 hours after it was launched. This sparked speculations surrounding the removal of the CBN-backed app. However, the app was restored some hours ago, with the Director of the CBN Corporate Communications, Osita Nwanisobi, stating there was never a major challenge, but the need to run some updates on the app for better performance.

With that out of the way, a lot of Nigerians aren’t clear how the Nigerian eNaira is any different from the money in their bank accounts. Let’s break it down by answering the most crucial questions surrounding the Nigerian eNaira.

Why eNaira in the first place?

The eNaira is meant to serve as a cheaper, more efficient, widely accepted, safe, and trustworthy alternative to the traditional Naira. In addition, the CBN stated in its guide that it will improve the efficiency of monetary policy, strengthen the government’s ability to implement targeted social initiatives, and increase remittances through official channels. There is no need for a third party in transactions, which might cut transaction time and cost. Even more important, is the efficiency with which the eNaira will support the inclusion of people who are unbanked.

How exactly will eNaira work?

The CBN provide the eNaira to intermediaries, that is, the financial institutions who would in turn help supply to individuals/customers. These institutions, mostly banks will oversee identity verification, eNaira payment processing, and generation of wallets for Nigerians to store their eNaira. Through the eNaira app, customers would be able to choose any Nigerian bank, connect to their bank accounts and make transactions.

What will eNaira users be structured?

Users of the eNaira will follow a tiered structure. The requirement for each tier is as follows:

1. Tier 0

Users are required to provide

  •  Passport Photograph
  •  Personal Information (Name, Place & Date of Birth, Gender & Address); 
  •  Telephone Number (NIN issued but not linked to phone number). 

2. Tier 1 – 3

You can read the documentation requirements for Tiers 1 to 3  in the table below, or the full CBN Circular on Tiered Know Your Customer (T-KYC) requirements by clicking HERE.

Special requirements for:


Merchants are expected to have existing bank accounts with financial institutions. Further requirements at the point of onboarding are: 

  • TIN
  • BVN of MD/CEO
  • Email address; Yes, there are transaction and balance limits for individual eNaira wallets. These have been drawn out by the CBN.

Business Category

Here, Compliance Officers at the Merchant’s bank shall carry out final verifications and activation of their eNaira Merchant Speed Wallet. 

Are there transaction or/and balance limits?

Yes, Individual eNaira wallets do have transaction and balance restrictions. See the limitations in the table below.

Category Daily Transaction Limit  Balance/eNaira Speed Wallet Limit
Tier 0 (Phone number without verified NIN)  N20,000.00 N120,000.00
Tier 1 (Phone number with verified NIN)  N50,000.00  N300,000.00
Tier 2  N200,000.00  N500,000.00
Tier 3  N1,000,000.00  N5,000,000.00
Merchant No Limit  No Limit 

 How do you onboard and make use of the platform?

Yes, there are a number of prerequisites for onboarding. The CBN will automatically onboard Financial Institutions (FIs), while Merchants will be onboarded by FIs after downloading the eNaira Speed Merchant App from app stores and meeting certain registration conditions.

The Ministries, Departments, and Agencies (MDAs) will be onboarded by the CBN once the relevant mandate is received.

Consumer onboarding will be self-service following the download of the “eNaira Speed App” from the app stores and the completion of certain requirements, including:

  • Completion of all mandatory requirements; 
  • Acceptance of the eNaira speed app’s Terms and Conditions
  • Acceptance of the eNaira speed app’s Privacy Policy

How will the eNaira affect Nigeria’s financial system?

The e-naira has a number of advantages, one of which is the expansion of financial inclusion. As a result, financial transactions will be simplified and widen the scope of financial transactions, affecting people, companies, non-governmental organisations (NGOs), religious institutions, Diaspora Nigerians, and MDAs, among others.

READ ALSO: eNaira: Why Nigerians May be Slow to Adopt the Digital Currency

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