Nigeria’s digital currency, eNaira, is a legal tender just like the naira that must be accepted by all merchants and business outlets as a form of payment in the country, Musa Jimoh, Central Bank of Nigeria (CBN) director of payment system management, has said.
The CBN official disclosed this during an interview on Channels TV’s ‘Business Morning’ show on Monday.
“Today, anywhere you present naira to pay, compulsorily it must be accepted because that is our fiat currency. So, the same way naira is accepted that you can’t reject it, is the same way e-naira must be accepted,” Mr Jimoh said.
The CBN on August 30 announced plans to launch its own digital currency on October 1 after instructing banks to close crypto-related accounts in February.
The CBN governor, Godwin Emefiele, said the e-Naira would operate as a wallet against which customers can hold existing funds in their bank account, and that the currency would accelerate financial inclusion which will enable cheaper and faster remittance inflows.
E-naira must be accepted
While urging Nigerians using android and iPhone mobile devices to download the e-Naira wallet from October 1 from the application stores respectively, Mr Jimoh said CBN will bear all liabilities of the digital currency.
“The liability of the e-naira money is directly on CBN which is similar to the cash you hold. The liability of the cash you hold today rests with the CBN. So, it gives Nigerians the opportunity to bank with CBN,” Mr Jimoh said.
Asked if Nigeria is ready for the e-naira implementation due to the technological challenges in the country, the official said that he does not expect it to pose any serious problem.
“E-Naira is a journey. We don’t expect that on October 1, all business merchants in Nigeria will accept it. We don’t even expect that come October 1, all Nigerians will have e-naira. It is a journey. It will continue to grow,” he said.
He said: “Remember there was a time in this country when you had to practically beg business outlets, merchants and others to accept POS transactions. But we have come to a point where traders now beg for POS terminals.”
Mr Jimoh noted that one of the benefits of the e-Naira is that it would save the cost of printing new naira notes, and that charges incurred while transferring funds would be lower for those using the e-naira.
“Today the cost of producing the naira and coins is very high. It costs money to print naira in this country. Now, the minting of e-naira is electronic, so it reduces cost,” he said.
“Why we chose a foreign firm”
Specifically, the apex bank official was asked why the CBN chose a foreign firm instead of a fintech company in Nigeria, Mr Jimoh said it had to do with capacity.
He said Bitt Inc., which will handle the project, had done similar projects for other countries and already had the capacity and experience, but that the company would be registered and managed in part by Nigerians while the technological aspect would be handled by the foreign arm.
“The CBN digital currency is not what every country has implemented. We are blazing the trail in Africa. Nigeria is the only country in Africa that is doing it. And so many advanced countries are not doing it,” Mr Jimoh said.
He said; “You can only talk of China and the Bahamas that have tried to do something serious on central bank digital currency. So, the technology is not everywhere you need to be very sure. You cannot use Nigeria as a testing ground and say oh if it works, well, if it doesn’t work. You have to use entities that have done it, that are sure of it.”
The CBN director said: “What we did is to partner with an entity that has done it, that has that experience because we know that eventually, the system is going to run in Nigeria.”
“So, we also want to domicile some responsibilities here. So, the arrangement is such that you are going to have a Nigerian incorporated company, Bitt Nigeria, which will be running the system,” he added.
