Nigeria had earlier in the year announced it planned to launch its own CBDC. The eNaira was announced after the government had banned banks and financial institutions from facilitating crypto transactions in the country. The timeline for the launch of the eNaira has been put at sometime before the end of the year. Citizens of the country would then be able to operate an eNaira wallet against which customers can then hold existing funds in their bank account.
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To help bring its CBDC project to fruition, the Nigerian government has announced a new partnership. Bitt, a Barbados-based fintech startup, has been engaged by the Central Bank of Nigeria (CBN) to be its technical partner in this project. The fintech startup has previously led the development of the Eastern Caribbean Currency Union’s “DCash”. DCash is credited as the first digital cash issued by a currency union central bank.
Enabling Faster And Cheaper Transactions With CBDC
The governor of Nigeria’s Central Bank, Godwin Emefiele, revealed the partnership in Abuja, the nation’s capital city, on Monday. According to the CBN governor, the introduction of the eNaira would enable cheaper and faster transactions. This would make remittances from citizens living in the diaspora a smoother experience. It would also accelerate financial inclusion and increased cross-border trades.
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The CBN has announced in July that it planned to unveil the eNaira on October 1st, which happens to be the nation’s Independence Day. This was in a bid to keep up with other nations’ central banks who are currently exploring the possibilities of CBDCs. With an apparent 80% of the world’s central banks already exploring the option of launching a CBDC.
The Nigerian CBDC project, known as Project Giant, has been in the works since 2017. The project had been launched following the increased popularity of digital payments in the country and the world at large. Bitt Inc. was chosen for its expertise and proven track record in this area.
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“The CBN’s selection of Bitt Inc, from among highly competitive bidders, was hinged on the company’s technological competence, efficiency, platform security, interoperability, and implementation experience,” the statement read.
Nigeria’s Crypto Ban
Back in February, amid increasing popularity especially amongst youths in the country, the government had put out a circular that essentially banned transacting in cryptos. It instructed financial institutions and banks which were facilitating the buying, selling, and trading of cryptos to seize those operations with immediate effect. The Nigerian government has previously warned against the use of cryptos in the country. Explaining that digital currencies were not legal tender. And thus, traders were not protected in the case of a crash or scams.
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Calls were made for the CBN to revisit this harsh rule, hoping for a reversal. But so far, the government has maintained its stand on the crypto ban. Instead coming out with the announcement that it was releasing its own digital currency, the eNaira.
Instead of crippling the budding crypto use in the country, this ban only seemed to have accelerated it. It is reported that Nigerians moved almost $40 million in bitcoin in a 30-day period using P2P transactions. Making it the highest bitcoin trading country on the planet.
Featured image from Coingape