Godwin Emefiele and CBN e-naira
Emefiele, CBN governor


A series of polls and surveys conducted by Business Hallmark point to the conclusion that Nigerians still share robust confidence in the Central Bank of Nigeria’s digital currency, E-Naira, despite initial hiccups, but the inherent fragile infrastructure and, to some extent, the initial botched take off of the currency, are toning down their optimism.

The apex bank, it would be recalled, had earlier in the year fixed October 1, 2021 for the launch of the currency afterabout four years of researching and seeking perfection for it.However, the bank on September 30, announced the postponement of the launch of the eNaira.

According to the CBN’s spokesperson, OsitaNwanisobi, the bank took the decision to postpone the launch in deference to the mood of national rededication to the collective dream of One Nigeria.

He said the bank and other stakeholders were working to ensure a seamless process that will be for the overall benefit of customers.

BH reliably gathered that the much anticipated launch on Independence Day was aborted due to some technical hitches experienced prior to the launch, as well a legal suit that is posing a threat to the successful birth of the currency.

Reliable sources in the know had confided in BH that the e-Naira platform received a huge and unexpected traffic that left the CBN management with no option than to shut down the platform to prevent a crash.

This suspension, the sources claimed, also led to the postponement of the October 1 launch date.

“We were prepared to launch the e-Naira on the 1st of October 2021 as planned, but the unexpected happened, forcing a postponement.

“The e-Naira website recorded about 480,000 hits the first day it went live on September 27. The visits grew to over 1.7 million the next day and has continued to average over 2.8 million hits daily since then.

“Apart from attracting hits, the website also recorded a surge in usage with the time spent on the site generating content of over 80 GB daily.

“The unexpected and sustained surge in traffic on the website, which is over 1,000 percent more than what we envisaged, made us to advice the CBN management to postpone the official launch for us to conduct another stress test on our systems to ensure it is capable of withstanding a further surge in traffic when they go live.

“For the launch to go ahead, the system must past a strenuous test that it can withstand a surge in visits”, one of the systems engineers contracted by the CBN for the eNaira project had informed our correspondent.

While findings revealed that the CBN had resolved the technical hitches that led to the initial delay of the takeoff of the currency, it seems the bank has not been able to overcome the legal obstacles put on the way of the E-naira by a firm that is claiming copyrights infringement.

The firm, E-Naira Payment Solutions Limited, had launched a legal challenge against the CBN for stealing its brand name, e-Naira.

ENaira Payment Solutions, through its solicitor, OlakunleAgbebi& Co, accused the CBN of trademark infringement, warning the bank to desist from using the proposed name.

“We are Solicitors to ENAIRA PAYMENT SOLUTIONS LIMITED (RC 508500) which was incorporated on the 7th of April, 2004.

“Our client is and remains a valid and existing legal entity having complied with the statutory requirements as regards the filing of its annual returns and the payment of company income tax.

“Our client is the holder of the Trademark “E-Naira” registered in Class 36 and Class 42. It has come to our client’s notice that the Central Bank of Nigeria (CBN) has announced the planning launching of a financial under what it termed its Central Bank Digital Currency to be known as “eNaira’.

“This action amounts to a threat to willfully infringe on our client’s Trademark. It will also amount to a violation of its corporate name i.e. ENaira Payment Solutions Ltd. The ramifications of this illegal act of the CBN are extensive.

“For this reason, our client has approached the federal high court in suit No. FHC/AB/CS/113/2021 between ENairaRayment Solutions Limited v Central Bank of Nigeria to seek restraining orders, including an order to restrain the CBN from proceeding with the proposed launching on the 1st of October 2021.

“In the interim, the CBN is hereby warned to cease and desist from using or purporting to use the name “eNaira” for its product or in any way, form or manner infringing or threatening to infringe on our client’s Trademark or violating our client’s corporate name”, the legal firm said.

The CBN, however, got a temporary relief when a Federal High Court in Abuja ruled that the launch could go ahead in the national interest and on the basis that the plaintiff shall be adequately compensated if he eventually wins the case. The case was subsequently adjourned to 11 October.

Meanwhile, all is now set for the launch of the digital currency as President MuhammaduBuhari will formally unveil it on Monday, October 25, at the State House, Abuja.

“Following series of engagements with relevant stakeholders including the banking community, fintech operators, merchants and a cross-section of Nigerians, the CBN designed the digital currency, which shall be activated on Monday, October 25, 2021.

“The eNaira, therefore, marks a major step forward in the evolution of money and the CBN is committed to ensuring that the eNaira, like the physical Naira, is accessible by everyone,” the bank assured.

In readiness for the launch, money had already been printed and wallets already active with selected users who are directly involved in the launch.

The CBN had in February stopped commercial banks from accepting cryptocurrencies, claiming the virtual currency was not yet insured or regulated in the country. It expressed worry about illicit flows of cash and the ability of cryptocurrencies to travel in and out of Nigeria unannounced and untaxed.

Smarting from the knocks and condemnations that greeted the order, the apex bank, in a radical departure from itsinitial warning to Nigerians to stay away from the digital currency space, announced that it was considering producing its own digital currency.

The CBN said the digital currency which was conceived as far back as 2017 was renewed and accelerated earlier in the year after it stopped financial institutions from processing cryptocurrency-related transactions.

After a long period of inactivity and troubling silence from the apex bank, which brought about doubts on the viability of the currency, the CBN, in a flurry, announced numerous decisions taken to ensure successful take off of the currency.

One of them is the release of drafts guidelines on e-Naira to participating banks on August 29. According to the draft document to banks seen by Business Hallmark, the e-Naira which is a legal tender and exchangeable in all the 36 states of the federation and the Federal Capital Territory (FCT), will have non-interest-bearing CBDC status, a transaction limit for customers and a value-based transaction limit.

The e-Naira has five features. They are Monetary Authority Suite;Financial Institution Suite;eGovernment Suite and the Retail Consumer Suite.

Under the Monetary Authority Suite, the CBN will be tasked with handing the first product component. These include issuing, distributing, redeeming and destroying the currency. Other duties of the apex bank are storing data on a cloud server, as well as monitoring and analysing currency transactions.

On the other hand, the Financial Institution Suite is reserved for licensed financial institutions who will be able to request currency or issue stable-coins, manage digital currency across branches, Know Your Customers (KYC) and AML compliance capability.

While the eGovernment Suite is available to the government to process digital payments sent to and received from individuals and businesses.

Under the suite, merchants will provide low-cost payment and business management software, POS, remote payment solutions, online capabilities, transaction analysis and reconciliation.

Lastly, the Retail Consumer Suite contains features user-centred designs for customers seekingefficient user experience. The architecture will be expandable to enable innovation; features advanced privacy and security.

Apart from the main features of the program, the CBN also outlined the transaction cost for the e-Naira wallet.

While the digital currency infrastructure does not charge for user-to-merchant transactions and P2P wallet transactions, participating banks have the responsibility to promote and market the centrally issued digital currency as a cash alternative to existing and potential customers.

Banks will be allowed to invite all their customers to register for the e-Naira. Besides pre-generated codes, the banks are allowed to send invitation codes for onboarding to a specific list of selected customers. Onboarding will be done for customers who have a code assigned by their banks.

The CBN, however, stated that the wallet provided by itwas merely a stop-gap measure for meeting the deadline, noting that banks and other licensed operators will provide their own wallets since it didn’t intend to compete against them.

Also on August 31, the CBN announced that it had engaged Bitt Inc, a Barbados-based digital financial technology firm as technical partner for the project.

According to the CBN, Bitt Inc was chosen through a highly competitive bidding process.

“In choosing Bitt Inc, the CBN relied on the company’s tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean Countries.

“Bitt Inc. was key to the development and successful launch of the central bank digital currency (CBDC) pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021,” the CBN stated.

Speaking on the development, the Director-General, Securities and Exchange Commission, Mr.LamidoYuguda, saidthat the digital currency would help improve the capital market when combined with vibrant inter-developmental policies.

“People would want to position their digital currencies in such a way that many other users, beyond their borders, would use this particular currency,” the SEC boss said.

A renowned economist, Dr.BiodunAdedipe, said the CBN listened to wise counsels by creating the e-Naira wallet.

“I told the CBN in a recent engagement that the way to go is to encourage that (e-Naira), because behind the crypto is a blockchain technology, and there is a whole lot it does beyond crypto.

“If you want to encourage investment in that sector, you better encourage crypto also, but set the standard and think about creating the eNaira.

“Once they set a framework for banks and anyone that will participate in that space, they would be setting the pace and not playing catch up”, said Adedipe, who is the founding partner of BiodunAdedipe Associates.

A fintech expert, Kalu Aja, said the eNaira, would give birth to a crypto clearing house and facilitate instant international transfers between local and international banks, as well as boost remittances when fully deployed.

“There will be no need to wire money or hire a department to verify and track payments. Nigerian airlines for instance can send dollars to service their planes and CBN can create exporters window where instant remittance of export proceeds can flow back in a crypto currency.”

However, a fixed Income trader at the United Bank for Africa (UBA), DumebiUdegbunam, while hailing the move by the apex CBN, warned that cyber security and internet connectivity would be the issues in implementing the e-Naira.

“Nigeria is faced with power supply and internet connectivity issues (we have one of the slowest internet and worst networks in the world) for the implementation to be as vigorous as it is intended to be.

“Furthermore, there is the issue of cyber security. A recently released report showed that cybercrime will cost the world $10.5 trillion annually by 2025 in damages. In 2020 alone, the global loss from hacking and cybercrimes increased by nearly $ 1 trillion.

“For West Africa’s most populous nation not to add to these indices when the e-Naira is implemented, we need to invest in cyber security or partner with the right people to guide that heavily,” Udegbunam advised.

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