The central bank of Nigeria has started issuing out guidelines for its proposed e-naira digital currency to Nigerian Banks. The features and design of the central bank digital currency CBDC were outlined by the CBN in a sensitization document sent to all the commercial banks in Nigeria.
According to the document, the CBDC dubbed “Project Giant” will be pegged to the value of the naira. E-naira is not an interest-bearing currency it offers parity of value. It will work alongside the Nigerian naira and only the CBN will be responsible for issuing, distributing, and redeeming the digital currency in addition to monitoring and management functions.
Nigeria’s CBDC will operate within a tiered Anti-Money Laundering and Know Your Customer structure with different transaction limits. The base of the (AML/KYC) pyramid will accommodate unbanked citizens who will be required to provide their national identity and phone number for verification. The daily transaction limit for citizens in this category is NGN 50,000 about $120.
Citizens who own bank accounts fall under the second and third tiers depending on the number of AML/KYC steps completed. The daily level of this level is NGN 200,000 ($487) and NGN 1 million ($2,438). To use the third-tier citizens will need to complete a physical AML/KYC verification process in addition to bank verification.
The CBN wants to make sure the transfer between the e-naira wallet and bank account is smooth with no fees to encourage the adoption of the CBDC. The document also offers process flows for International Money Transfer Operators and the proposed e-naira, highlighting plans to integrate the CBDC with the central bank’s forex control policies.