CBN Outlines Regulations For E-Naira Transactions, Charges and Limits

The Central Bank of Nigeria on Tuesday had announced its partnership with a fintech company towards the launch of the nation’s first digital currency, “E-naira”. The announcement which was however made public by the apex institution’s governor, Mr. Godwin Emefiele in Abuja revealed that the E-Naira which was the first of its kind would however increase cross-border trade, accelerate financial inclusion, provide cheaper and faster remittance inflows as well as improvement in monetary policy effectiveness.

As part of the presentation made by the CBN on Tuesday, the E-Naira is expected to be a legal tender for the entire country, which would be accessible to both bank account and non-account holders.

The laid regulations as proscribed by the CBN are meant to regulate the transactions of the E-Naira in terms of its charges, transaction limits and also, serve as guidelines.

The regulations are;

Consumer Wallets

In order to meet up with the October deadline of its launch, a three-tier consumer “speed wallet” system will be issued by the apex bank before banks and other licensed operators can provide their own wallets for the E-Naira.

The first tier 1 wallet is open to anyone without a bank account. It also comes with a transfer limit of ₦50,000 and a cumulative balance of ₦300,000 fixed daily. The minimum requirement to open this wallet is a National Identity Number (NIN).

For second tier 2 wallets users, an existing bank account with a linked bank verification number (BVN) is the minimum requirement for this level. Users are restricted to sending and receiving ₦200,000 daily and having a balance of ₦500,000.

Lastly, the third 3 wallet holders can transact up to ₦1,000,000 daily with the cumulative balance set at ₦5,000,000. At least a BVN is needed to get this wallet category.Transaction limits on merchant-level wallets are also set at ₦1,000,000 per day, though there are no limits to how much users can have in their accounts.Central bank digital currencies differ from crypto. Here’s how they work.

Zero Charges

The e-Naira also has a non-interest-bearing CBDC status and in addition, there won’t be charges on merchant services, user-to-merchant, and peer-to-peer wallet transactions. The zero charges also apply when users send money from their wallets to bank accounts and make withdrawals at agent or merchant locations.After the launch, Nigerian banks can invite all their customers to register for the e-Naira, with necessary validation and verification processes. The banking regulator notes that the e-naira system, being a National Critical Infrastructure, will be subject to comprehensive security checks.According to the central bank, Nigerian banks are to “market and promote the adoption of eNaira as a digital version of cash to existing and potential customers, in support of financial inclusion objective of the CBN.”

Five-Stage Launch

According to the reports made by the CBN, the new revelations concerning the E-Naira’s design as well as the operational module are contained in a document that was recently sent to banks by the CBN. The same document also shares details about the duties assigned to each of the parties participating in the e-naira program.As explained in the report, the CBN itself will be responsible for the first part of the e-naira rollout. This will involve the issuing, distribution, redemption, as well destruction of the currency. In the second stage, which is called the Financial Institution Suite, “licensed financial institutions will be able to request currency or issue stablecoins.” They will also “manage digital currency across branches, KYC, identify and AML compliance capability.”The Nigerian government will become involved at the third stage where it will “process digital payments sent to and received from citizens and businesses.” At the fourth stage are merchants who are expected to provide “low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation.” The last stage, which is also known as the Retail Consumer Suite, will focus on the digital currency’s architecture.