Some cryptocurrencies – known as stablecoins – are pegged to currencies, but none are backed by governments.Īs Johnson Chukwu, founder and managing director of Cowry Asset Management Limited explained on Arise News’s Morning Show, “it’s not in coins and it’s not in notes, it’s in virtual format. It is therefore unlikely to be as volatile as a cryptocurrency. In contrast, while transactions in eNaira will be made anonymous by the CBN, it will still have access to information provided by users and be able to trace transactions, explain Oturo and Omniyi.Īs the eNaira has the same value as the physical naira, its value will rise or fall in relation to the dollar in the same way as the fiat currency. The CBN issued its regulatory guidelines for the eNaira on 1 October.Īs Davidson Oturu and Oluwapelumi Omoniyi writing on the Mondaq website explains, “CBDC is defined as a digital payment instrument, denominated in the national unit of account, that is a direct liability of the central bank… cryptocurrency is built on blockchain technology which ensures the decentralisation of the creation, regulation, and use of cryptocurrency through the use of decentralised computer networks.”įurthermore, the blockchain technology on which cryptocurrencies are built makes them anonymous. They are issued by a central authority and are therefore trusted by traders. The eNaira will be a central bank digital currency, or CBDC, issued by the government, and it will have the same value as the paper, or fiat, currency.ĬBDCs differ from cryptocurrencies in being regulated and therefore subject to banking laws.

How does the eNaira differ from a cryptocurrency like Bitcoin? It is not intended to replace cash but will function as a safe and efficient alternative means of payment. The eNaira will be an electronic version of the local paper naira currency, equal in value and issued by the Central Bank of Nigeria.

Will the launch of the eNaira be a success?.

Why was the original launch of the eNaira delayed?.

How will the eNaira affect Nigeria’s banks and fintechs?.

How does the eNaira work and what are its advantages?.

Will you need a smartphone to access the eNaira?.

Who are the CBN’s partners in the eNaira rollout?.

How does the eNaira differ from cryptocurrencies such as Bitcoin?.

In this article we answer the following questions:

In a statement released on 23 October, the director of communications of the Central Bank of Nigeria (CBN), Osita Nwasinobi, said that the eNaira “marks a major step forward in the evolution of money and the CBN is committed to ensuring that the eNaira, like the physical Naira, is accessible by everyone… The theme of the eNaira is: ‘Same Naira, more possibilities.'”

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