what is enaira, everything you need to know

Have you heard of eNaira? It’s the Central Bank of Nigeria’s digital currency, and it’s making a big splash in the financial world.

But what exactly is eNaira? And how does it work?

In this blog post, I’m going to give you a crash course on everything you need to know about eNaira. I’ll explain what it is, how it compares to other digital currencies, and how you can start using it.

So if you’re curious about eNaira, or if you’re thinking about using it, stick around!

What is eNaira?

what is enaira, everything you need to know

eNaira is a central bank digital currency (CBDC) issued by the Central Bank of Nigeria. It is the digital form of the Nigerian naira, and it is used just like cash.

CBDCs are a new type of digital currency that are issued and regulated by central banks. They are different from cryptocurrencies like Bitcoin and Ethereum, which are decentralized and not regulated by any government.

How does eNaira work?

eNaira is stored in a digital wallet, which can be accessed on a smartphone or computer. To use eNaira, you simply need to scan a QR code or enter a merchant’s ID.

eNaira transactions are processed instantly and securely. They are also cheaper than traditional bank transfers.

How does eNaira compare to other digital currencies?

eNaira is similar to other CBDCs, such as the digital yuan and the digital euro. It is also similar to cryptocurrencies, in that it is a digital form of money that can be used to make online and offline payments.

However, there are some key differences between eNaira and other digital currencies. For example, eNaira is issued and regulated by the Central Bank of Nigeria, while cryptocurrencies are decentralized and not regulated by any government.

How can I start using eNaira?

To start using eNaira, you need to create a digital wallet. There are a number of different eNaira wallets available, so you can choose one that best suits your needs.

Once you have created a wallet, you can deposit money into it using your bank account or debit card. Once your wallet is funded, you can start using eNaira to make payments to merchants and other individuals.

What is a central bank digital currency (CBDC)?

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A CBDC is a digital form of a country’s fiat currency, issued and regulated by the central bank. CBDCs are designed to have the same value and legal status as physical cash.

What are central bank digital currencies (CBDCs)?

CBDCs are digital forms of fiat currency, issued by central banks. They’re similar to cryptocurrencies like Bitcoin, but there are some key differences. CBDCs are backed by the full faith and credit of the issuing government, which means they’re considered to be very safe and stable. They’re also regulated by central banks, which helps to prevent fraud and other financial crimes.

Why are CBDCs important?

CBDCs offer a number of potential benefits, including:

  • Convenience and speed: CBDCs could make it easier and faster to make payments, both domestically and internationally.
  • Financial inclusion: CBDCs could help to bring more people into the formal financial system, especially those who don’t have access to traditional banking services.
  • Efficiency and innovation: CBDCs could make the financial system more efficient and innovative, by enabling new types of financial products and services.

Are CBDCs here yet?

CBDCs are still in their early stages of development, but a number of countries are already experimenting with them. The Bahamas, for example, launched a digital version of its dollar in 2020. And the Bank of England is currently running a pilot project for a digital pound.

It’s still too early to say when CBDCs will be widely adopted, but they have the potential to revolutionize the way we pay for things. In the next few years, we’re likely to see more and more countries launch their own CBDCs.

Why was the eNaira created?

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As you know, the eNaira is Nigeria’s central bank digital currency (CBDC). It’s a digital form of the naira that can be used to make payments, send and receive money, and buy goods and services.

But why was the eNaira created in the first place?

There are a few reasons. First, the eNaira is designed to promote financial inclusion. In Nigeria, about 40% of the population is unbanked, meaning they don’t have access to traditional banking services. The eNaira makes it possible for anyone with a smartphone to make and receive payments, regardless of whether they have a bank account.

Second, the eNaira is designed to make cross-border payments more efficient and affordable. In the past, sending money to Nigeria from abroad could be expensive and time-consuming. But with the eNaira, cross-border payments can be made instantly and at a low cost.

Third, the eNaira is designed to reduce the cost of processing cash. Printing and transporting cash is expensive, and it’s also a major security risk. The eNaira can help to reduce these costs and risks.

Finally, the eNaira is designed to support economic growth. By making it easier for people to make and receive payments, the eNaira can help to boost economic activity.

Challenges that still need to be addressed

Despite its many benefits, there are still some challenges that need to be addressed before the eNaira can be widely adopted.

  • Awareness: Many Nigerians are still not aware of the eNaira or its benefits.
  • Adoption: More businesses and merchants need to start accepting the eNaira as a form of payment.
  • Infrastructure: The eNaira requires a reliable internet connection to use. This can be a challenge in some parts of Nigeria, where internet access is limited.

How to get started with using the eNaira

To get started with using the eNaira, you’ll need to download the eNaira wallet app. The app is available for both Android and iOS devices.

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Once you’ve downloaded the app, you’ll need to create an account. You’ll need to provide some basic information, such as your name, email address, and phone number.

Once your account is created, you can start adding money to your eNaira wallet. You can do this by transferring money from your bank account or by using a debit card.

Once you have money in your wallet, you can start using the eNaira to make payments and send and receive money.

What are the goals and objectives of the eNaira?

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The eNaira is Nigeria’s central bank digital currency (CBDC), which was launched in October 2021. It is a digital form of the Nigerian naira, issued and regulated by the Central Bank of Nigeria (CBN). The eNaira can be used to make payments and transfer funds between individuals and businesses, both domestically and internationally.

The CBN has outlined the following goals and objectives for the eNaira:

  • To improve financial inclusion. The eNaira is designed to make financial services more accessible and affordable for Nigerians, including those who are currently unbanked or underbanked. The CBN aims to achieve this by making it easy for people to open and use an eNaira wallet, and by offering low-cost or free transactions.
  • To improve the efficiency and security of payments. The eNaira is a digital currency, which means that it can be used to make fast and secure payments without the need for cash or intermediaries. The CBN also aims to reduce fraud and counterfeiting by using blockchain technology to secure eNaira transactions.
  • To promote economic growth and development. The CBN believes that the eNaira can help to boost economic growth and development in Nigeria by reducing the cost of transactions, increasing financial inclusion, and attracting foreign investment

In addition to these general goals and objectives, the eNaira is also being used to support specific government initiatives, such as the disbursement of social welfare benefits and the collection of taxes.

How is the eNaira being used?

The eNaira can be used to make payments and transfer funds in a variety of ways, including:

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  • Person-to-person (P2P) payments: Individuals can send and receive eNaira to each other using the eNaira Speed Wallet.
  • Person-to-business (P2B) payments: Individuals can pay businesses for goods and services using the eNaira Merchant Wallet.
  • Business-to-business (B2B) payments: Businesses can make payments to each other using the eNaira Business Wallet.
  • Cross-border payments: The CBN is working with other central banks to develop the infrastructure needed to support cross-border eNaira payments.

Is eNaira the same thing as Bitcoin?

No, eNaira is not the same thing as Bitcoin.

eNaira is a central bank digital currency (CBDC) issued by the Central Bank of Nigeria. It is a digital form of the Nigerian naira, and it is backed by the full faith and credit of the Nigerian government.

Bitcoin is a decentralized cryptocurrency that is not issued or regulated by any government or central bank. It is based on blockchain technology, which means that all transactions are recorded on a public ledger that cannot be tampered with.

Here is a table that summarizes the key differences between eNaira and Bitcoin:

CharacteristiceNairaBitcoin
IssuerCentral Bank of NigeriaDecentralized
RegulationRegulated by the Nigerian governmentUnregulated
BlockchainPrivate blockchainPublic blockchain
SupplyControlled by the Central Bank of NigeriaLimited supply
Use casesCan be used for all types of transactions, including payments, remittances, and investmentsCan be used for payments, remittances, and investments, but it is also seen as a store of value

In short, eNaira is a digital version of the Nigerian naira, while Bitcoin is a decentralized cryptocurrency.

How eNaira is different from Bitcoin

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The eNaira and Bitcoin are both digital currencies, but they have some key differences.

  • Centralization: The eNaira is a central bank digital currency (CBDC), which means it is issued and regulated by the Central Bank of Nigeria. Bitcoin, on the other hand, is a decentralized cryptocurrency, which means it is not controlled by any government or financial institution.
  • Blockchain: The eNaira is built on a private blockchain, while Bitcoin is built on a public blockchain. This means that the eNaira’s blockchain is only accessible to authorized participants, such as the Central Bank of Nigeria and its partners. Bitcoin’s blockchain, on the other hand, is accessible to anyone.
  • Value: The eNaira is pegged to the Nigerian naira, meaning that its value is always equal to the value of the naira. Bitcoin, on the other hand, is a volatile asset with a fluctuating price.
  • Use cases: The eNaira is intended to be used as a digital form of the Nigerian naira, for everyday transactions such as shopping and paying bills. Bitcoin, on the other hand, is often used as an investment asset or a store of value.

Here is a table that summarizes the key differences between the eNaira and Bitcoin:

FeatureeNairaBitcoin
CentralizationCentralizedDecentralized
BlockchainPrivatePublic
ValuePegged to the Nigerian nairaVolatile
Use casesEveryday transactionsInvestment asset, store of value

Why the eNaira runs on a private blockchain

The eNaira, Nigeria’s central bank digital currency (CBDC), runs on a private blockchain. This is because the Central Bank of Nigeria (CBN) wants to maintain control over the currency, including onboarding, KYC, and the creation of new eNaira.

A private blockchain is a blockchain that is not open to the public. Only authorized participants can access the network and view the transaction history. This gives the CBN more control over the eNaira than it would have if it were running on a public blockchain.

There are a few reasons why the CBN might want to maintain control over the eNaira. First, it wants to prevent fraud and money laundering. By controlling who can use the eNaira, the CBN can make it more difficult for criminals to use the currency for illegal activities.

Second, the CBN wants to be able to control the supply of eNaira. This is important for maintaining the value of the currency. If there were too much eNaira in circulation, it could lead to inflation.

Third, the CBN wants to be able to develop new features and functionality for the eNaira. This is easier to do with a private blockchain, as the CBN does not have to rely on consensus from other participants to make changes.

Of course, there are also some drawbacks to using a private blockchain. For example, it is less transparent than a public blockchain. This means that it is more difficult for the public to audit the eNaira system and ensure that it is being operated fairly.

Additionally, private blockchains are often less scalable than public blockchains. This means that they may not be able to handle as many transactions per second. However, the CBN has stated that it is working to address this issue.

The CBN has decided that the benefits of using a private blockchain for the eNaira outweigh the drawbacks. This is because the CBN wants to maintain control over the currency and be able to develop new features and functionality for it.

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What is the value of the eNaira?

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The value of the eNaira is the same as the value of the naira. This means that one eNaira is equal to one naira. The Central Bank of Nigeria (CBN) maintains this 1:1 value by backing the available eNaira with a naira reserve.

In other words, the eNaira is a digital version of the naira. It has the same value and can be used to purchase goods and services in the same way as physical naira banknotes and coins.

However, the eNaira also offers some advantages over physical naira. For example, it can be used to make instant and free payments to anyone in Nigeria, regardless of whether they have a bank account. It can also be used to make payments to international merchants, without incurring expensive foreign exchange fees.

How does the CBN maintain the value of the eNaira?

The CBN maintains the value of the eNaira by backing it with a 1:1 naira reserve. This means that for every eNaira in circulation, there is an equivalent amount of naira held by the CBN in its reserves. This backing ensures that the eNaira has the same value as the physical naira.

Imagine that the CBN is a bank and the eNaira is a digital bank account. When you deposit money into your bank account, the bank holds on to that money and credits your account with the same amount. In the same way, when the CBN issues eNaira, it backs it with an equivalent amount of naira.

This means that the eNaira is always worth the same as the physical naira. If the value of the naira falls, the value of the eNaira will fall with it. And if the value of the naira rises, the value of the eNaira will rise with it.

The CBN also uses a variety of other tools to maintain the value of the eNaira, such as interest rates and foreign exchange reserves. But backing the eNaira with a naira reserve is the primary way that the CBN ensures that the eNaira has a stable value.

How the CBN issues and manages the eNaira 

The Central Bank of Nigeria (CBN) issues and manages the eNaira, Nigeria’s central bank digital currency (CBDC), using a platform model. The CBN is the provider of the core ledger, the platform that will enable and record transactions. It will grant other financial players in the country access to build on the platform via APIs.

The eNaira runs on a private blockchain, which means that the CBN is able to control onboarding, KYC, and the creation of eNaira. This is why the CBN used the Hyperledger Fabric, a system that allows private organisations to create their private blockchain.

Here is a step-by-step overview of how the CBN issues and manages the eNaira:

  1. The CBN mints the eNaira and issues it to authorized financial institutions (AFIs).
  2. AFIs then distribute the eNaira to their customers through eNaira wallets.
  3. Customers can use their eNaira wallets to make transactions with merchants and other users.
  4. When a customer makes a transaction with eNaira, the transaction is recorded on the eNaira blockchain.
  5. The CBN monitors and supervises the eNaira system to ensure its smooth operation and security.

The CBN has also issued a set of regulatory guidelines for the operation of the eNaira. These guidelines cover areas such as customer onboarding, KYC, AML/CFT, and transaction limits.

eNaira: The Role of Banks

Banks play a vital role in the eNaira ecosystem, serving as intermediaries between the Central Bank of Nigeria (CBN) and customers. Their roles include:

  • Onboarding customers to the eNaira: Banks can help customers to open eNaira wallets and link them to their bank accounts. This makes it easier for customers to start using eNaira to make payments and receive funds.
  • Facilitating eNaira transactions: Banks can process eNaira transactions between customers and merchants. This includes both peer-to-peer transfers and payments to merchants.
  • Providing customer support: Banks can provide customer support to eNaira users. This includes helping them to resolve issues with their eNaira wallets and transactions.

How banks can benefit from the eNaira

The eNaira offers a number of potential benefits for banks. These include:

  • Increased customer engagement: The eNaira can help banks to increase customer engagement by providing them with a new and convenient way to make payments and receive funds.
  • Reduced transaction costs: The eNaira can help banks to reduce transaction costs by providing them with a more efficient way to process payments.
  • New revenue opportunities: The eNaira can create new revenue opportunities for banks by enabling them to develop new eNaira-based products and services.

How to get an eNaira wallet

To get an eNaira wallet, you can download the eNaira Speed Wallet app from the Google Play Store or Apple App Store. You will then need to create an account and verify your identity using your National Identification Number (NIN) and Bank Verification Number (BVN).

How to fund your eNaira wallet

You can fund your eNaira wallet through your bank account, using your bank’s mobile app or website. You can also fund your eNaira wallet with cash, through an eNaira verification agent or at a designated bank branch.

How to use the eNaira to make payments

To make a payment with the eNaira, simply open your eNaira wallet app and scan the QR code of the merchant you are paying. You can also use your eNaira wallet to make online and in-app payments.

How to use the eNaira

The eNaira is a Central Bank Digital Currency (CBDC) issued by the Central Bank of Nigeria as a legal tender. It is the digital form of the physical Naira and can be used the same way as cash.

To use the eNaira, you will need to download the eNaira wallet app from the Google Play Store or Apple App Store. Once you have downloaded the app, you will need to create an account and verify your identity.

Once your account is verified, you can fund your eNaira wallet by transferring money from your bank account or by depositing cash at a designated eNaira merchant.

To make a payment with eNaira, you can scan the merchant’s QR code using the eNaira wallet app. You can also use the eNaira wallet app to send money to other eNaira users.

Here is a step-by-step guide on how to use the eNaira:

  1. Download the eNaira wallet app from the Google Play Store or Apple App Store.
  2. Create an account and verify your identity.
  3. Fund your eNaira wallet by transferring money from your bank account or by depositing cash at a designated eNaira merchant.
  4. To make a payment with eNaira, scan the merchant’s QR code using the eNaira wallet app.
  5. Enter the amount you want to pay and confirm the payment.

Types of eNaira wallets”

There are two main types of eNaira wallets:

1. eNaira Speed Wallet

The eNaira Speed Wallet is a digital wallet that allows users to send, receive, and store eNaira. It is available for both individuals and merchants. The Speed Wallet is easy to use and offers a variety of features, including:

  • The ability to create a personalized profile
  • The ability to link your bank account or debit card
  • The ability to send and receive eNaira payments instantly
  • The ability to view your transaction history
  • The ability to set up recurring payments
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To create an eNaira Speed Wallet, you will need to provide your name, phone number, and email address. You will also need to create a password and PIN. Once you have created your account, you can start using it to send and receive eNaira payments.

2. eNaira Merchant Wallet

The eNaira Merchant Wallet is a digital wallet that allows merchants to accept eNaira payments for goods and services. It is available for both online and offline businesses. The Merchant Wallet offers a variety of features, including:

  • The ability to create a personalized profile
  • The ability to link your bank account
  • The ability to accept eNaira payments from customers
  • The ability to view your transaction history
  • The ability to generate QR codes for customers to scan and pay

To create an eNaira Merchant Wallet, you will need to provide your business name, address, and tax identification number. You will also need to create a password and PIN. Once you have created your account, you can start using it to accept eNaira payments from customers.

What you need to open an eNaira wallet

To open an eNaira wallet, you will need:

  • A smartphone with an internet connection
  • A valid Nigerian Bank Verification Number (BVN)
  • A valid National Identity Number (NIN)

Once you have these requirements, you can download the eNaira wallet app from the Google Play Store or the Apple App Store.

Once the app is installed, you will need to create an account by providing your BVN, NIN, and other personal information. Once your account is created, you will be able to fund your wallet using your linked bank account or debit card.

Once your wallet is funded, you can start using eNaira to make payments at merchants that accept eNaira. You can also use eNaira to transfer money to other eNaira wallet users.

The different tiers of eNaira wallet and their requirement

The eNaira wallet is a digital wallet that allows you to store, send, and receive eNaira, Nigeria’s central bank digital currency (CBDC). There are four tiers of eNaira wallets, each with different requirements and transaction limits.

Tier 0

  • Requirements: Phone number
  • Daily transaction limit: ₦20,000
  • Cumulative balance limit: ₦120,000

Tier 0 is the most basic tier of eNaira wallet and is available to anyone with a phone number. However, it has the lowest transaction and balance limits.

Tier 1

  • Requirements: NIN-verified phone number
  • Daily transaction limit: ₦50,000
  • Cumulative balance limit: ₦300,000

To open a Tier 1 eNaira wallet, you need to have your NIN verified. This can be done at any NIMC registration center. Once your NIN is verified, you can open a Tier 1 wallet by downloading the eNaira app and entering your NIN and phone number.

Tier 2

  • Requirements: BVN and phone number
  • Daily transaction limit: ₦200,000
  • Cumulative balance limit: ₦500,000

To open a Tier 2 eNaira wallet, you need to have a BVN. This can be obtained from any bank in Nigeria. Once you have a BVN, you can open a Tier 2 wallet by downloading the eNaira app and entering your BVN and phone number.

Tier 3

  • Requirements: BVN, phone number, and public utility receipt
  • Daily transaction limit: ₦500,000
  • Cumulative balance limit: ₦5,000,000

Tier 3 is the highest tier of eNaira wallet and has the highest transaction and balance limits. To open a Tier 3 wallet, you need to have a BVN, phone number, and public utility receipt. The public utility receipt can be from any utility company, such as electricity, water, or gas. You can open a Tier 3 wallet by downloading the eNaira app and entering your BVN, phone number, and public utility receipt details.

Here is a table that summarizes the different tiers of eNaira wallet and their requirements:

TierRequirementsDaily transaction limitBalance limit
Tier 0Phone number (NIN issued but not linked to phone number)N20,000N120,000
Tier 1Phone number with verified NINN50,000N300,000
Tier 2BVN and phone numberN200,000N500,000
Tier 3BVN, phone number, and public utility receiptN1,000,000N5,000,000

How to open an eNaira wallet

You can open an eNaira wallet through a participating financial institution (FI). To do this, you will need to provide the required documentation and complete the onboarding process. Once your wallet is open, you can fund it with fiat currency or other digital assets.

Advantages of using the eNaira wallet

The eNaira wallet is a digital wallet that allows users to store, send, and receive eNaira, the Central Bank of Nigeria’s digital currency. It offers a number of advantages over traditional payment methods, including:

Free transfers: All eNaira wallet transfers are free, regardless of the amount or the recipient’s location. This makes it a very cost-effective way to send money, especially for those who frequently make international transfers.

Fast transactions: eNaira transactions are processed instantly, so you can say goodbye to long wait times for your money to arrive. This is especially beneficial for businesses, as it allows them to receive payments from customers quickly and efficiently.

Quick setup time for people without bank accounts: Anyone with a smartphone and an internet connection can create an eNaira wallet, even if they don’t have a bank account. This makes it a more inclusive payment system that can help to reduce financial exclusion.

Advantages of using the eNaira wallet

The eNaira wallet is a digital wallet that allows users to store, send, and receive eNaira, the Central Bank of Nigeria’s digital currency. It offers a number of advantages over traditional payment methods, including:

Free transfers: All eNaira wallet transfers are free, regardless of the amount or the recipient’s location. This makes it a very cost-effective way to send money, especially for those who frequently make international transfers.

Fast transactions: eNaira transactions are processed instantly, so you can say goodbye to long wait times for your money to arrive. This is especially beneficial for businesses, as it allows them to receive payments from customers quickly and efficiently.

Quick setup time for people without bank accounts: Anyone with a smartphone and an internet connection can create an eNaira wallet, even if they don’t have a bank account. This makes it a more inclusive payment system that can help to reduce financial exclusion.

Disadvantages of using the eNaira wallet

The eNaira is Nigeria’s central bank digital currency (CBDC), launched in October 2021. It is a digital form of the Nigerian naira that can be used to make payments and transfers online and offline. While the eNaira has many advantages, there are also some disadvantages to using it.

Here are some of the disadvantages of using the eNaira wallet:

  • Data privacy concerns: The eNaira wallet requires users to provide their National Identification Number (NIN) in order to open an account. This has raised concerns about data privacy, as the NIN is linked to a lot of personal information.
  • Security risks: Like any digital wallet, the eNaira wallet is vulnerable to hacking and other security threats. Users need to be careful to protect their wallets from unauthorized access.
  • Limited acceptance: The eNaira is still a new currency, and not all merchants accept it yet. This can be a limitation for users who want to use the eNaira for everyday purchases.
  • Technical challenges: The eNaira wallet is a complex piece of technology, and there have been some reports of technical glitches. This can be frustrating for users who are trying to use the wallet to make payments or transfers.

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