The Central Bank of Nigeria (CBN) has released the unstructured supplementary service data (USSD) code for eNaira, the country’s digital currency, to make it easier for more people to use money in Nigeria.
The USSD transaction code was inaugurated on Thursday by the CBN governor, Godwin Emefiele, at a five-day Northern eNaira fair in Kano.
Nigeria’s Central Bank Digital Currency, a culmination of years of strategic research into expanding the payments system’s boundaries, would enable Nigerians to transact on the eNaira wallet easily by using the code on any mobile phone.
Recall that in June, the apex bank announced its intention to introduce a USSD code to improve the adoption of the eNaira in all strata of Nigerian society.
Represented by the deputy governor of operations, Folashodun Adenisi-Shonubi, Emefiele said the new code — *997# — was created to enhance financial inclusion and avail Nigerians endless possibilities through financial services.
The head of the CBN said that the eNaira was a strategic move that was made because the bank’s job is to keep money and finances stable.
“It captured the slogan, “same naira, more possibilities”, and was designed to impact the lives of Nigerians and transform the economy positively,” he said.
“The eNaira is expected to enhance inclusion, support poverty reduction, enable direct welfare disbursement to citizens, support a resilient payments ecosystem, and improve the availability and usability of central bank money.”
Emefiele also said that it would help diaspora remittances, lower the cost of processing cash, and make cross-border payments more efficient, among other things.
According to him, about 45 per cent of Nigerians do not have bank accounts, while 35.9 per cent have no access to formal financial services.
However, he stated that approximately 81 per cent of Nigerian adults own mobile phones.
According to the apex bank governor, “In addition, there are 150 million mobile subscribers in Nigeria, according to NCC, June 2022,” he said.
Therefore, eNaira seeks to leverage the huge opportunity mobile telecommunication presents as a distribution channel for offering digital services to the underserved and unbanked population.
Accordingly, the eNaira is expected to increase remittances, boost trade, enhance financial inclusion and enable welfare payments to make the government more fluid.
Hence, the CBN assured that the eNaira marks a major step forward in the evolution of money and that it is committed to ensuring that the eNaira, like the physical Naira, is accessible by everyone.
During the event, Abdullahi Ganduje, the governor of Kano, spoke through Sagir Muhammad, a special adviser on cabinet affairs. He thanked the CBN for setting up the eNaira USSD code in his state.
He promised his administration would make sure businesses could grow and help the state’s social and economic development.
Ganduje also added that the state government would use the eNaira platform for its empowerment programmes and enjoined Nigerians to use the opportunity to advance their businesses.
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African Nations’ Disposition to eNaira
With Nigeria acclaimed as the “Giant of Africa”, Emefiele said in May that central banks across Africa and other nations are attempting to study Nigeria’s eNaira project.
He says, “We feel delighted with what we are doing in the area of the Central Bank Digital Currency, CBDC.” “What we are doing in the area of eNaira is attracting the interest of different countries in the world,” Emefiele said during an experience-sharing tour of the CBN’s CBDC (eNaira) by officials of the Bank of Uganda in Abuja.
He then noted that the CBN had been receiving a lot of enquiries from central banks in Africa and different parts of the world who were trying to understand what the bank was doing.
As of the first quarter of 2022, eNaira had recorded 840,000 downloads since it was launched on October 25, 2021, and about N4 billion in transactions have been carried out across the 270,000 active wallets, comprising 252,000 consumer wallets and 17,000 merchant wallets.
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Understanding the eNaira
The Central Bank Digital Currency (CBDC), or eNaira, is a legal currency issued by the Central Bank of Nigeria. It is backed by the law. The currency is the digital form of the Naira and is used just the way the cash form is used.
eNaira can only be used through the eNaira wallet, which is similar to a bank account and is created similarly. However, the wallet will be a separate account that is not linked to an existing regular bank account.
Using eNaira for transactions will only be possible between two parties who both possess an eNaira wallet, which enables users to store, send, and receive eNaira.
In contrast to Bitcoin, which is a crypto-currency that also runs on the blockchain like the CBDC, the eNaira is a digital currency issued by the government, and it will maintain a uniform value like the Naira.
The eNaira is also safe and allays the fears of possibly losing one’s funds. This is because it is Nigeria’s digital form of cash, and it is a direct liability of the Central Bank of Nigeria, while customer deposits are direct liabilities of the financial institutions.