digital currency
digital currency

The Central Bank of Nigeria (CBN) has announced that it will launch the pilot scheme of its digital currency (eNaira) by October 1, 2021.

Rakiya Mohammed, CBN director of information technology, had disclosed this during a private webinar with stakeholders on July 22.

She explained that the apex bank started a research on the Central Bank digital currency (CBDC) in 2017.

According to her, the project name is tagged ‘GIANT,’ while the eNaira will be operated on the Hyperledger Fabric Blockchain.

The Hyperledger Fabric is an open-source project that acts as a foundation for developing blockchain-based products, solutions, and applications. It uses plug-and-play components that are aimed for use within private enterprises.

A CBN document seen by TheCable answers pertinent questions about Nigeria’s soon-to-be-launched digital currency.


CBDC is a digital representation of sovereign currency that is issued by a jurisdiction’s monetary authority like the Central Bank.

It is a direct liability of the Central Bank that issued it. It is not meant to replace cash and bank deposits but to coexist as an additional form of issued money.

CBDC can be divided into two categories: retail and wholesale. 

A “retail” CBDC would be used as a digital extension of cash by all people and companies, whereas a ‘wholesale’ CBDC could be used only by permitted institutions as a settlement asset in the interbank market by permitted institutions.


Retail CBDC is generally meant for the general public and average consumers conducting daily transactions, while Wholesale CBDC is suitable for exchanging and trading among central banks, and private banks.


CBDC is a direct liability of Central Banks and issued by a monetary authority. It means that the apex bank can approve or override transactions since it is in control of the infrastructure.

The digital currency will be backed by law to become legal tender.


In contrast, cryptocurrency is private money with no central authority. It is not a legal tender, and it is not a liability of the Central Bank or any of its regulated institutions.

Unlike cryptocurrencies that operate via blockchain networks in a decentralised way, a CBDC is a state-issued and controlled digital asset.

In February, the apex CBN issued a circular, directing Deposit Money Banks (DMBs), non-bank financial institutions and other financial institutions to close accounts used for crypto transactions within their systems.

The apex bank insisted that transacting in cryptocurrencies portend “risk of loss of investments, money laundering, terrorism financing, illicit fund flows and criminal activities.”



The CBN document explained that the eNaira CBDC lifecycle includes a 4-step process to full implementation and adoption.

The CBN is responsible for the design, creation and storage of CBDC. 

It would be distributed to CBDC to financial institutions and licensed service providers who will, in turn, make them available to individuals and businesses.

Transactions with CBDCs can either be online or offline. Individuals and businesses will be able to transfer value in real-time via existing and future payment channels (e.g. mobile).

The CBN will continue to monitor and maintain CBDC.


The CBDC has the potential to reduce cash handling costs by 5 – 7 percent, deepening digital financial inclusion and promote the development of e-commerce.

It would promote formal cross-border payments for efficiency, convenience and affordability.

The CBDC would promote the digitisation of cash and the development of e-commerce, as well as deepen digital financial inclusion.

Its potential benefits to the government include the provision of a reliable mechanism to distribute fiscal stimulus to citizens.

The apex bank stated further that the eNaira would reduce tax leakages due to tax evasion and illicit money flows. It is also expected that the currency will improve cross-border trade, enhance financial inclusion, remittance improvement, and others.

Source: TheCableNG


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