Alkali Amana, on behalf of Aryze, interviewed Dr. Babatunde Oghenobruche Obrimah, COO at the Nigeria Fintech Association. This discussion was conducted as part of Aryze’s Content Ambassador program.

The eNaira, a landmark project by the Central Bank of Nigeria (CBN), is set to launch on Nigeria’s Independence Day, October 1st. This digital currency represents a pivotal moment in Nigeria’s journey toward financial innovation and inclusion. To understand its potential impact on Nigeria’s economy, its applications, and future outlook, we spoke with Dr. Babatunde to shed light on the currency’s significance.

What Does the eNaira Mean for Nigeria’s Economy?

Money has evolved significantly, from commodity money (barter trade) to stablecoins and other digital currencies. The eNaira is the digital equivalent of Nigeria's paper currency. Its benefits include reduced costs of printing physical cash, support for cashless policies, and fostering financial inclusion.

Why Adopt a Digital Currency, and What Does It Mean for Fintech and Microfinance in Nigeria?

The introduction of the eNaira will not disrupt the operations of banks, microfinance institutions, or Fintechs. The CBN will continue to manage currency issuance, distributing it through banks and financial institutions acting as retail providers. This ensures seamless integration into the existing financial ecosystem.

How Will Commercial Banks Interact with the eNaira?

Under the CBN’s current framework, commercial banks will distribute the eNaira rather than issue it. However, this policy could evolve in the future to allow banks to issue the digital currency directly.

What Technology Powers the eNaira, and How Will It Onboard Existing Customers Without Disruption?

The eNaira is built on a blockchain-based platform. The CBN has implemented a three-tier approach for adoption, requiring users to download the eNaira wallet for onboarding. Transaction limits of ₦50,000, ₦200,000, and ₦1 million ensure minimal disruption to traditional banking operations while encouraging broader adoption.

What About Privacy and Customer Data Protection?

The CBN is expected to release privacy and data protection policies for the eNaira. Ensuring robust data protection measures is essential to safeguard customer trust and avoid legal liabilities associated with compromised data.

What Are the Opportunities and Challenges in Introducing the eNaira?

As a pilot project, the eNaira is expected to evolve over time. The primary concern among Fintechs is the lack of direct involvement in the technical implementation. However, the potential for innovation and scaling far outweighs initial apprehensions.