Ahead of eNaira Launch on October 1st, CBN Makes Digital Currency Compulsory For Payments

When the Central Bank of Nigeria (CBN) ordered banks and other financial institutions not to provide any support for cryptocurrency transactions, you would have thought that was the end for digital currency in Nigeria.

No says the CBN. Godwin Emefiele, the Governor of Nigeria’s apex bank even said that digital currencies have a place in Nigeria. Well, few weeks after the restrictions, the CBN revealed plans to launch the eNaira, Nigeria’s digital currency possibly on October 1st. This date is significant because it is Nigeria’s independence day.

What Nigerians did not know then was that the CBN wanted a crypto marketplace it can regulate and control. This is unsurprising as crypto is now the go-to way to launder money with ease.

To show its seriousness about eNaira, the CBN recently published draft guidelines for the digital currency and appointed Bitt Inc as its technical partner.

Now, the Central Banks has said that eNaira must be accepted as payment for businesses and merchants. This was disclosed by Musa Jimoh, CBN’s director of payment system management when he recently featured on Business Morning, a Channels Television programme, on Monday, He said that eNaira is a legal tender just as the naira.

“Today, anywhere you present naira to pay, compulsorily it must be accepted because that is our fiat currency,” he said.

“So, the same way naira is accepted that you can’t reject it, is the same way e-naira must be accepted. Anywhere in this country where e-naira is presented, it must be accepted. So, merchants must accept e-naira as a means of payment.”

On whether Nigeria was ready for the e-naira due to the technological challenges in the country, he said that he didn’t expect it to be a serious problem.

“eNaira is a journey. We don’t expect that on October 1, all business merchants in Nigeria will accept it. We don’t even expect that come October 1, all Nigerians will have e-naira. It is a journey. It will continue to grow,” he said.

He said that one of the benefits of the eNaira is that it would save the cost of printing new naira notes.

“Remember there was a time in this country when you had to practically beg business outlets, merchants and others to accept POS transactions. But we have come to a point where traders now beg for POS terminals.”

“Today the cost of producing the naira and coins is very high. It costs money to print naira in this country. Now, the minting of e-naira is electronic, so it reduces cost.”

He added that charges of transferring funds would be lower for those using the e-naira.

The digital currency for Nigeria is quite commendable. The world is moving towards it and the giant of Africa can’t be left behind. However, making eNaira compulsory as a form of payment may backfire. This is because some of these merchants may not be well-informed about it. It then behooves the CBN to embark on a campaign to educate Nigerians about it.

If not, it would be a failed project from the beginning. Even when you look at the value compared to others, it might discourage youths who are the drivers of cryptocurrencies from using it. But let us wait and see.