The Central Bank of Nigeria (CBN) has released its initial guidelines for its proposed Central Bank Digital Currency called “e-naira”.
In a document sent to commercial banks in the country, CBN revealed key design features of its CBDC.
The CBDC project, with the official name of “Project Giant’, is planned to be pegged on the value of the country’s currency, the naira.
The e-naira is expected to provide parity value but will not be an interest-bearing currency.
The CBDC is planned to run alongside Nigeria’s fiat currency, and the Central Bank of Nigeria will issue, distribute, and redeem the CBDC among other monitoring and management functions.
Security measures
Also, e-naira will function under a tiered Anti-Money Laundering and Know Your Customer (AML/KYC) structure with various transaction limits implemented on citizens.
The unbanked citizens of Nigeria will be required by the government to provide their national identity-linked phone numbers for verification purposes. Since they are under the unbanked category, they are only limited to a daily transaction of 50,000 nairas, which is equivalent to around $120.
For citizens with bank accounts, they will fall under the second and third tiers, depending on the number of AML/KYC steps that they have already completed.
For citizens who are included in these two levels, they will be given a daily limit of 200,000 nairas ($487) for the second tier and 1 million nairas ($2,438) for the third tier.
Merchants will fall under the third tier and will be allowed a 1 million nairas limit.
Seamless implementation
The CBN wants to ensure that the e-naira rollout in the country would be as smooth as possible. The Bank said that it wants to see smooth transfers between e-naira wallets and bank accounts to let citizens experience the convenience of the new system.
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