The Central Bank of Nigeria has released the draft of the guidelines for the operation of its central bank digital currency. The country’s central bank has forwarded the guideline containing the design and operation of the digital naira to the commercial banks in the country.
Nigeria Joins Country Planning for CBDC
The digital currency named e-Naira has gotten a drafted guideline of operations. The guideline stated that the CBDC will be non-interest-bearing and will have transaction limits depending on the total value. The digital currency, however, will automatically be a legal tender in the country.
Information from the central bank in June 2021 revealed that the e-Naira would be available for implementation before the end of the year.
The program for the release of the CBDC will contain five stages which will settle the concerns around the monetary authority, the issuance of the currency, redemption, distribution, and the destruction of the currency on the first stage.
The second stage, however, deals with the derivative financial institutions involved. This concerns the request and the issuance of digital currency. The financial institutions concerned will also manage the currency across the country and facilitate AML/KYC compliance.
The third stage is about the eGovernment suite, which sees to the B2B and B2C distribution focusing on the remote payment solution, business management software, and other online capabilities. The online capabilities focus on the privacy, security, and user experience of the currency.
Nigeria has been named one of the most technologically inclined countries in Africa. It has also become a hotspot for cryptocurrencies leading the African continent in investment and involvement.
There was an increase in the popularity of cryptocurrency in the country, leading to the ban of digital assets in the country. Despite the ban, the locals are still much involved in crypto trading and investments.
The Increasing Development of CBDCs Globally
Central bank digital currency has been a trending topic for discussion and debate in the crypto space. The government has come together to issue global regulation for the crypto space, and the natural off-shoot of these meetings is the development of CBDCs.
Various countries have announced their plans for digital currency, and most of them are either in the trial phase or conceptualization phase.
One of the leading countries in the race of CBDC issuance is China who hopes to release its digital RMB after series of successful pilots. For the United States, there has been no announcement of the intention of the development of CBDC as the country is currently concerned with a solid crypto regulatory framework.