The eNaira can now be used for remittances — CBN

The Central Bank of Nigeria (CBN) has announced that individuals residing outside Nigeria can now send money into the country using its central bank digital currency (CBDC) — the eNaira. 

The details 

• In a circular dated June 15, the bank noted that the move is aimed at driving adoption for the digital currency and providing an easy alternative for Nigerians to receive remittances.
• The sender initiates a transaction by choosing a preferred International Money Transfer Operator (IMTO) to send the money through. They then provide the IMTO with the foreign currency payment and the eNaira wallet address of the beneficiary.
• After receiving the payment from the sender, IMTO proceeds to deposit the equivalent amount of eNaira into the beneficiary's eNaira wallet.
• This can be done either through the eNaira web wallet portal or by integrating with the eNaira's portal using the API provided by the CBN. 
• The bank added that all foreign currency to naira conversions would be at the Investors and Exporters (I&E) FX window rate. 

Zoom in 

• There have been calls for the CBN to make the eNaira a possible option for cross-border remittance payments. Recently, the vice chancellor of the University of Ilorin — a university in northcentral Nigeria — urged the apex bank to make the eNaira accessible to Nigerians in diaspora. 
• Remittances to Sub-Saharan Africa grew by 5.2% in 2022, a development attributed to strong inflows to Nigeria and Kenya. 
• However, these remittances require a huge fee. In what is the most expensive worldwide, it cost an 8.01% fee to send money across borders in Africa last year. 
• It is unknown how much fees would be charged for each cross-border transaction settled with the eNaira. 

Zoom out 

• The eNaira witnessed a slow adoption after it launched in 2021.  
• However, that has seen an increase in more recent times. Per a Mariblock report, the CBN said that eNaira transaction volume rose by 63% between January and March. Additionally, of the 10 billion eNaira minted, 3.4 billion were already in circulation and 13 million new wallets were created between October and March. 
• This increase was attributed to the Nigerian government’s social welfare program.