What is digital currency or e-currency?
Digital currency or e-currency is form of money or payment that is available only in electronic format. It does not have any tangible form such as check, bill or coins.
It is accounted for and transferred using electronic codes in computers. As the world advance in technology day in day out, technology has becomes increasingly prominent and extending it revolution to every corner of the world.
In the finance sector, payments are becoming more digital and technological resulting to the use of physical or tangible money.
Nigeria established her e currency and named it e-Naira. All you need to know. as the apex bank of Nigeria, central bank is set to launch a digital currency for the nation soonest and named it e-Naira.
in June 2021, the apex bank of Nigeria, central announced their pre-plan to build a digital currency named, e-Naira by October 2021 thereby making them one of the 81 countries that are strongly rooting for digital currencies adoption.
What is the e-Naira all about?
The apex bank of Nigeria’s (CBN) decision to launch the country’s digital currency came after two years of deliberation on digital currency on either to follow the trend or debunk it.
The CBN intention is to achieve 80% financial addition by the end of 2021 which is also another reason to develop digital money.
E-Naira will serve as an alternate of the paper naira currency provided by the central bank of Nigeria.
The e-Naira will be a complimentary legal tender in Nigeria, which shall have the same exchange worth as the naira, and maintain a parity of value with the naira.
From info gathered from nairametrics.com, the e-Naira will not earn any interest to holders.
The e-Naira is built on a blockchain open ledger technology which means a duplicate of the currency cannot be own by anyone as each e-Naira shall be unique in a different way.
Will the E-Naira serve as a stable coin ?.
Stable coins are coins that are backed by holding an equivalent of FIAT like the US dollar.
FIAT means, government-issued coins but usually are not backed by any commodity.
An example of a stable coin is USDT which is tied to the US Dollar and as well maintains a stable exchange value with the currency.
Technically,E-Naira is linked to the fiat naira which is not a stable currency.
Therefore for e-Naira to be a stable coin, it has to be tied to a stable currency like Euro, US Dollar or even the Yuan.
How safe is the e-Naira going to be
Think of the e-Naira in this way; you want to gift a friend in a remote area 100 naira that does not have a bank branch in that village.
The best way to do this is to buy mobile recharge card worth of the value and text the number to your uncle and your uncle will no go ahead to any phone card retailer and to redeem the card at a discount price of 80naira.
The mobile retailer can now extract the card and then pay cash to your uncle because he trusts the person doing the exchange.
Although he can’t really tell if the mobile numbers are real
The e-Naira is established to curb the verification risk by assuring all holders that each e-Naira is a valid token.
This authenticity is achieved by developing the e-Naira on the blockchain.
That is, instead of buying phone credits, you can just debit your bank account of N100 and convert it to e-Naira.
Transfer it to your uncle in which he can spend directly from his phone or probably transfer and get his cash.
The majority of retailers may likely embrace the development of e-Naira as there is the least probability for it to be fake.
Features of e-Naira
While there isn’t enough information on the e-Naira digital currency, Which is yet to be launched but will soon, below are five major features of the project you need to know about.
*It can be used and transferred across the globe.
*The e-Naira will be available for both national and international transfers & transactions with little to no time lag and affordable transaction fees than tangible currencies.
*It will also allow users to move existing funds in your bank to your digital currency account.
*It is absolutely digital.
*The e-Naira will be the central
*With the development of the e-Naira, Nigerians can now venture in cross-border trade and as well enjoy a cheaper and flexible inflow of remittances.
*A digital currency like e-Naira will provide more fiscal opportunity for Nigerians as they will be able to establish new business opportunities and financial products and services.
*A financial institutions such as banks will still be relevant.
*The e-Naira will be implemented through a two-tiered model which will enable a structure that leaves no space for public-private partnership.
*Just like physical currency, the apex bank will design the e-Naira but will be distributed through a regulated financial body and thereby providing digital cash to individuals and businesses.
*Implementation is on track
As reported by Channels TV, a recent development in the process of implementing digital currency is the selection of a technical Fintech partner, Bitts Inc. after a thorough selection process, as prescribed by the Nigeria Public Procurement Act, BITTS Inc. emerged as a partner to the CBN for this innovative project.
Bitts Inc. will be with the creation of payment methods that will bring about an increase in social inclusion, financial inclusion and overall sustainable growth.
The quality and excellence in their method of activities earned them accolade from the Bretton Woods Institutions, IMF/World Bank etc.
This is the major reason the CBN enlisted and select them for this crucial project that’s imperative to national development