Nigeria’s central bank digital currency will go into pilot testing on Oct. 1 with a tiered AML/KYC regime for the eNaira.
After four years of development, the Central Bank of Nigeria (CBN) is set to roll out its digital currency project. The launch will reportedly happen on the occasion of the country’s 61st Independence Day celebration on Oct. 1.
Nigeria’s central bank digital currency (CBDC) project comes amid significant anti-crypto policies from the CBN and negative cryptocurrency sentiments from several government officials. The digital naira is also coming at a time when its fiat counterpart has plunged to new lows, with the central bank enacting even tighter forex restrictions.
Details of the eNaira project circulated across commercial banks in the country show plans for strict identity verification mandates for utilizing the digital currency. The CBN plans to introduce a tiered ID verification system with different transaction limits for each tranche.
With CBDCs seen as governments’ response to cryptos and privately-issued stablecoins across the globe, there are concerns that more anti-cryptocurrency laws may emerge in Nigeria. Indeed, China upscaled its crypto crackdown activities as soon as its digital currency project moved into the public testing arena.
Bitcoin (BTC) adoption in Nigeria continues to expand, as cryptocurrencies offer easier remittance vehicles especially for the country’s diaspora population in supporting relatives and loved ones back home. Crypto also offers a means for the upwardly mobile and tech-savvy younger population to shield their wealth from the rapid debasement of the naira.