On Monday, 25 October 2021, Nigeria became one of the few countries in the world and the first in Africa to launch a digital currency.
The eNaira was launched by President Muhammadu Buhari with the prospect of increasing Nigeria’s gross domestic product and improving cross-border trade in the coming years.
However, many Nigerians still don’t understand how the eNaira operates or how they can take advantage of this opportunity, even though the app is already available for download.
In this explainer article, we’ll take a more simplistic overview of the eNaira, how to access the eNaira wallet and fund your account.
Let’s jump right in:
What is eNaira?
eNaira is the Nigerian digital currency issued and regulated by the Central Bank of Nigeria (CBN), in line with Section 19 of the CBN Act.
The eNaira serves as both a medium of exchange and a store of value, offering simple, fast and cost-saving payment options.
Additionally, the role of the eNaira is complementary. It won’t replace the traditional Naira, rather it’ll help to make digital transactions safe and seamless.
Also, it’s worth noting that the eNaira has the same value — and exchange rate — as the physical Naira (one Naira equals one eNaira).
Is eNaira a Cryptocurrency?
To be clear, eNaira isn’t a Cryptocurrency like Bitcoin or Dogecoin. Rather, eNaira functions as a digital representation of the physical cash.
For example, it’s like having the PDF and paper versions of your résumé. The PDF version is faster, easier and can be used on the go.
Whereas, the paper version is limited in use. If you forget it at home or in transit, you may miss out on important functions like job interviews.
Furthermore, the eNaira is stable — unlike Cryptocurrency — its value won’t rise or fall. This means that you can’t invest in eNaira as a means to grow your fortunes.
How does the eNaira work?
This is how the eNaira works. The Central Bank of Nigeria (CBN) provides digital currency to licensed financial institutions (like banks).
These financial institutions handle ID verification, eNaira payment processing, and the creation of eNaira wallets for users to hold their currency.
With the eNaira Speed Wallet app, these processes become easier, as users can choose their respective banks, connect their accounts and carry out transactions.
What is an eNaira wallet?
The eNaira wallet is a digital account that holds the eNaira. You need it to access, hold, and make transactions with the digital currency.
Think of the eNaira wallet as your normal bank account, but only this time, you can transfer funds with more flexibility and make peer-to-peer payments.
Similarly, for a transaction to take place, both parties (sender and recipient) must have an eNaira wallet.
How do I use the eNaira Wallet?
To get started on using the eNaira wallet, follow these four easy steps:
- Download the eNaira Speed Wallet
You can download the eNaira Speed Wallet on your mobile device from the Google Play Store or Apple App Store. If you have a feature phone, you can also dial a USSD short code and follow the service prompts.
- Select your bank
From the list of banks provided, choose your preferred bank and proceed accordingly.
- Provide authentication
Input the following details exactly as captured during your BVN enrolment: first and last name, date of birth, state of origin, email and phone number.
- Fund your account
You can fund your eNaira Speed Wallet via any of your banks online or mobile banking channels and start making transactions.
How do I fund my eNaira Speed Wallet?
There are three convenient ways that users can fund their eNaira wallet. These include:
- Direct transfer from your bank account
- Transfer from another eNaira wallet
- Cash payment through an agent or a bank.
What are the advantages of the eNaira?
Now, I know what you might have been thinking: how’s the eNaira different from the traditional Naira, and what advantages does it have over cash?
First, eNaira is built on blockchain open ledger technology, which prevents duplication or creation of fake units.
What does this mean? Each eNaira is unique, traceable and can’t be forged. You can sleep well knowing your money is safe.
Second, with the eNaira, users can make contactless payments by scanning a QR code. Not only is this simple, but it’s also a much faster method of making transactions.
That’s not all, other advantages of the eNaira includes:
- Low charges
- No dispensing error
- Nationwide acceptance
- Service availability and reliability
- Advanced data privacy and security
Recommended Reading: The best places to launch a start in 2021: guide to tech hubs in Lagos
What are the benefits of eNaira?
According to the Central Bank of Nigeria (CBN), these are some benefits of the eNaira:
- Growth
eNaira fosters economic growth by offering easier access to capital and financial services, thereby increasing economic activities at low/no interest transaction rates.
- Remittance
eNaira provides a secure and cheaper diaspora remittance option and an increase in the speed of such transactions.
- Monitoring
eNaira’s traceability limits its use for illicit or fraudulent purposes
- Welfare
eNaira enables effective, equitable, and faster distribution of cash assistance to households and communities included in government’s social welfare programs.
- Inclusion
eNaira provides financial Inclusion by making financial services available to people or communities who do not have (enough) banking opportunities.
- Trade
eNaira increases local and International Trade by making transactions cheap, safe, quick, and better.
- Security
eNaira has stronger security because it cannot be forged because of its unique identity and security structure.
- Revenue
eNaira aids revenue collection by reducing cash handling costs.
Wrapping Up
Although, it’s uncertain whether the emergence of the eNaira will lead to further strengthening of the physical Naira.
But one thing is certain, besides enhancing digital payment options and seamless transactions, eNaira is also the future of Nigeria’s digital economy and financial inclusion.
Not only that, but the eNaira — to some extent — will cater for the growing number of Nigerians who have adopted the idea of peer-to-peer trading and cryptocurrency.