Nigeria: CBN introduces eNaira as payment option for diaspora remittance

The Central Bank of Nigeria (CBN) said it has introduced the use of its digital currency otherwise known as the eNaira as a payment option to recipients of diaspora remittance.

The apex bank said the move was part of its efforts to liberalize the payout of diaspora remittance.

This disclosure is contained in the CBN’s circular titled: “Operational Framework for eNaira Payment Option to Recipients of Diaspora Remittances,” addressed to the International Money Transfer Operators (IMTOs) and the public and signed by the bank’s Director, Trade and Exchange Department, Dr. Ozoemena Nnaji.

Nnaji said that the guidelines contained in the circular would facilitate the payment of proceeds of diaspora remittances to recipients who choose eNaira as a payment alternative.

eNaira payout to run concurrently with dollar payout.

CBN in the guideline said the IMTOs are required to apply for a one-time “No-Objection” to pay out in eNaira from the Central Bank of Nigeria (CBN).

The bank is also expected to provide account details where foreign currency from IMTOs shall be received.

The CBN however, stressed that the receipt of proceeds of diaspora remittance in eNaira remained optional, adding that the option of the digital currency payout shall run concurrently with the dollar payout.

How it will operate

The apex bank in the operating framework said that IMTOs are required to open merchant wallets through the CBN and pre-fund the CBN account with foreign currency.

The CBN will consequently fund the IMTO merchant wallet with the eNaira equivalent of the foreign currency earlier pre-funded by the IMTO.

The CBN further explained that the payment procedure shall involve a sender initiating a diaspora transfer with an IMTO of choice overseas providing details of the beneficiary’s wallet.

The IMTO then logs into the eNaira web wallet portal, debits its eNaira merchant wallet, and credits the beneficiary with the eNaira equivalent of the foreign currency sent at the origin at the I&E window rate.

Alternatively, the apex bank noted that IMTO could integrate with the eNaira portal from its platform via API provided by CBN and initiate the transfer of the eNaira equivalent of the foreign currency sent at the origin at the I&E window rate.

What you should know

• The CBN digital currency, eNaira, was launched on October 25, 2021, by former President Muhammadu Buhari to drive a more cashless, inclusive, and digital economy as well as complement the gains of previous monetary policy measures and fast-growing payments platforms.
• It is expected to help strengthen the stability of the banking system as deposits become more diversified when more people are banked, making it easier for the banking system to comply with existing laws such as anti-money laundering, customer protection against fraud, and ensuring the safety and stability of the payment system.
• The suspended CBN Governor, Godwin Emefiele, while speaking earlier on the importance of the eNaira in Africa’s largest economy listed other benefits to include; cross-border trade facilitation, financial inclusion, monetary policy effectiveness, improved payment efficiency, revenue tax collection, remittance improvement, and targeted social interventions.
• Despite its slow takeoff, the CBN recently disclosed that eNaira transactions have surged to 63%.
• It stated that the value of eNaira transactions had increased to N22 billion as of March 2023, from N8 billion on 700,000 transactions recorded as of the end of November 2022. About 13 million e-wallets have been opened since it was launched in October 2021.