The Central Bank of Nigeria (CBN) has released the e-Naira design paper which breaks down the objectives, principles, and the eNaira design architecture.
The design paper praises distributed ledger technologies (DLTs) for their ability to offer transparency, secure, and tamper-proof transactions while creating trust among transacting parties.
Part of the document reads:
“This design document gives much more detail on the critical dimensions of the eNaira, including the eNaira design and architecture, the initial eNaira functionality, what roles different economic actors play as the eNaira is introduced, the risks of the eNaira and how they will be mitigated, and the eNaira Implementation roadmap.
These critical details should give comfort to Nigerians that the eNaira has been well-conceived and the launch of the eNaira has been robustly planned.”
The eNaira will be a hybrid or a two-tiered CBDC architecture – CBN will issue the CBDC, including managing the central ledger of all transactions, while leveraging the existing financial system
The eNaira is based on Hyperledger Fabric variant of the DLT – this will allow the CBN to manage wallets while financial institutions and regulated market players will act as nodes on the network
The eNaira full implementation will be in 4 phases
The eNaira will use existing identity infrastructure – BVN, NIN, TIN etc. – to uniquely identify individuals and corporate entities to ensure a robust KYC framework
The Bank Verification Number (BVN) and the National Identity Number (NIN) will serve as unique identifiers for the eNaira tier structure – each wallet will be tied to the BVN or NIN to prevent duplicate identities and wallet creation
The eNaira will not earn interest
The role of AML / CFT checks will be handled by financial institutions who have close proximity to customers
CBN says it will collaborate with stakeholders to clearly articulate use cases that solve current needs, define clear value propositions, and conduct sensitization campaigns to ensure the success of the CBDC.