The CBN (Central Bank of Nigeria) has released preliminary guidelines to the country's local banks on the CBDC project dubbed e-Naira, which will be implemented in five phases.
The draft of the document provides for the design and structure of the project whose completion will be declared legal tender in Nigeria. The proposed project has been segmented into Monetary Authority Suite, Financial Institution Suite, eGovernment Suite, Merchants Suite and Retail Consumer Suite.
An electronic wallet is also ready
To determine the viability of the coin, CBN will focus on key elements, including Know Your Customer (KYC) systems, cloud server stability, merchant and consumer testing.
"As a national critical infrastructure, the e-naira system will be subject to comprehensive security checks, all data and personally identifiable information (PII) will be kept off the registry and will not be archived," the report said.
The CBN notes that the digital currency proposed by the central bank will offer parity in value and operate as a non-interest bearing CBDC.
The paper also outlines the e-Naira wallet test which will also incur transaction costs. The institution also plans to involve several citizens to test the currency through national banks.
Although inconclusive, the bank intends to include Merchant Suite in the e-Naira test phase. The lawsuit also seeks to offer point of sale and remote payment solutions for CBDC transactions.
CBN chooses Bitt for technical support
In line with the project, CBN will partner with Fintech Bitt Inc to offer technical support for the e-Naira project. In a statement, the bank indicated its decision to consider a CBDC.
"Given the significant explosion in the use of digital payments and the rise of the digital economy, the CBN decision follows an unmistakable global trend in which over 85% of central banks are considering adopting digital currencies," CBN said in a statement.
Interestingly, Nigeria's adventure into CBDC territory follows a February CBN decision to ban commercial banks from providing account services to cryptocurrency exchanges. Despite the ban, the use of cryptocurrencies in the country is still on the rise.
Nigeria also joins other African countries contemplating the implementation of a CBDC. Recently, the Bank of Ghana signed an agreement with a German financial company, Giesecke + Devrient (G + D), to carry out a pilot project for its central bank digital currency (CBDC).