Review of eNaira

Review of eNaira: Everything You Need to Know before Use

The Central Bank of Nigeria launched its digital currency called eNaira to help Nigerians buy and sell in Naira with ease online.

Godwin Emefiele who is the governor of the Central Bank of Nigeria earlier said that the official launch of eNaira would commence on October 1, 2021.

Ahead of the launching, the CBN released a website to facilitate the use of eNaira and advised people to visit the site to learn more on how to use the new online payment platform.

In response to this development, the apex bank suffered public criticisms and even got a lawsuit against the use of “eNaira” as a brand name for its digital currency.

Most concerns were centered on the negative impact of eNaira on deposit money banks (DMBs). Most people believe that the initiative can really help the Nigerian economy, but the apex bank might not have the integrity to sustain the project.

Meanwhile, the launching of eNaira was suspended and the reasons for it, according to the CBN, had no connection with the litigation.

Contrarily, the lawsuit received by the CBN, titled “Infringement of Trademark and Violation of Corporate Name Cease and Desist Notification to the Central Bank of Nigeria” was to suspend the project.

The plaintiffs claimed that eNaira was originally owned by “Enaira Payment Solution Limited” which was incorporated by the Corporate Affairs Commission (CAC) of Nigeria on the 7th of April, 2004.

The Federal High Court in Abuja, however, gave permission to the CBN to embark upon using the name and compensate the plaintiffs to end the case.

The idea of the Federal Government of Nigeria owning its own digital currency has been circulating around since 2017.

So, launching eNaira at this critical stage of our economy is not because the use of digital means of making transactions trends, but because the need for such innovation was long overdue.

  • What is eNaira and its benefits?
  • How does eNaira work?
  • How is eNaira different from other online payment options?
  • Would eNaira replace online bank transfer?

This review of eNaira contains everything you need to know about the Nigerian Central Bank Digital Currency before opting for it. And it will also serve as the best guide you need to get the most of the digital currency.

What is eNaira?

eNaira is simply the digital form of the Nigerian currency (Naira) which is intended to be used just like cash.

It is the digital currency created and controlled by the central bank of Nigeria, otherwise known as CBDC, using an open ledger blockchain technology which has the potential to track financial transactions across the platform.

What is eNaira created to do?

A poll of surveyed central banks around the world, which includes Nigeria, shows that 86% of central banks are exploring the opportunities open to having a homegrown digital currency.

According to the CBN, eNaira is created to provide a safe, cheap, and easy way to make transactions locally or internationally.

Other benefits of eNaira include:

The most visible benefit of eNaira is in its foundation: cheap, reliable, and easy to use to make payment and engage in other financial transactions digitally.

Specifically, the benefits include:

  • It can be owned by anybody: eNaira is a universal currency, meaning anybody can own it irrespective of their location or whether you have a bank account or not.
  • It can be used for both international and local trades: eNaira is versatile because it can be used to make transactions both on a local and an international level. It is backed by the Central Bank of Nigeria and the Nigerian government.
  • It serves as a form of remittance: A remittance is a payment of money that is transferred to another party. Nowadays, the term is mostly used to refer to as money sent by someone working abroad to his/her family living in Nigeria. eNaira can be used by anyone irrespective of location to send money anywhere.
  • It prevents rise of fraudulent activities in Nigeria: Whether this counts as a benefit or not, it depends on the user. But eNaira transactions can be traced and the central bank can use this to curb financial crimes in the country.
  • It offers secure transactions: eNaira is designed to ensure safety in online transactions by assuring users that the currency is valid. This is achievable because eNaira is built on the blockchain. If people accept it, any payment made with it cannot turn out to be fake as experienced with POS or normal bank transfers.
  • It creates financial opportunities for non-bank account holders: Millions of Nigerians do not have a bank account for different reasons. This is not because they do not need it but because of coverage issues, ineffective customer services and other challenges associated with the banking system in the country. The eNaira will end this by giving access to non-account holders to have and manage virtual accounts. The least it requires to use eNaira is a phone with NIN verified SIM card. With no bank account, you can be paid via eNaira and the payment will be stored in your wallet to make further transactions.
  • It provides business opportunities: You can become an eNaira merchant and make money helping people facilitate their daily transactions on the eNaira platform. This will create a job opportunity for people who are not gainfully employed.

eNaira vs bank accounts

You might ask, how does eNaira differ from your bank account?

The money you pay into your bank account is a direct liability of various financial institutions like commercial banks, insurance companies, investment banks and brokerage firms.

On the other hand, eNaira is a liability of the CBN.

This means that the apex bank is responsible for any risk involved in the use of the digital currency. It doesn’t mean eNaira will replace bank transfers.

eNaira is just another smart way of doing financial transactions online. Because CBN is responsible for eNaira, it is safer and cheaper than other online payment options in Nigeria.

eNaira vs cryptocurrency 

eNaira is different from cryptocurrency for reasons which are:

  1. eNaira is centralized unlike cryptocurrency which does not have a central figure or body that owns it.
  2. eNaira does not have interest attached to it so you cannot use it to speculate in order to make profit unlike cryptocurrency.


One of the similarities between eNaira and cryptocurrency is that both provide a wallet where you can store a digital currency.

How does eNaira work?

The central bank issues out the currency to financial institutions like banks who then retails it out to their customers by adding it to their service menus across their various payment platforms.

If your transaction limit is less than N50,000 per day, you do not need a bank account to use eNaira. With your NIN verified phone number, eNaira will be available for you to use.

For transactions above N50,000, you will be required to access the digital currency with your bank verification number (BVN).

Meanwhile, there is a daily limit of N1m to the transactions you can make with eNaira.

How to store eNaira

The eNaira website provides you with a digital wallet where you can store the purchased digital currency.

The wallet is encrypted with security like two factor authentication associated with major online payment apps like PayPal and Payoneer to prevent unauthorized access.

You can also use the wallet to see your transaction history, send money from one person to another through a linked bank account or linked card.

With your wallet, you can make payment in stores using QR codes.

Risks and challenges of eNaira and how to avoid them

The following are some of the risks envisaged in the use of eNaira and how to avoid them.

  1. Privacy issues
  2. Distrust between government and its citizens

The risks may vary from users to users. For this reason, some tips will be shared on how you can avoid the challenges associated with eNaira.

Privacy issues

One of the major risks associated with eNaira is the fact that the product works online, which means you will need internet service to access the eNaira app or website.

Meanwhile, this can not be a big deal to an average Nigerian as eNaira is not the first online payment platform used in Nigeria.

The fact is the Nigerian economy has reliable means of storing and processing essential personal information of people such as the use of BVN and NIN.

You would undergo the same phase to integrate eNaira into your business and extra measures are needed to protect your privacy.

Protecting your data against cyber threats is your responsibly.

Distrust between government and its citizens

Another issue which eNaira brings to light is the lack of trust between the Nigerian government and its people.

Various comments on social media attribute that the Nigerian government will use eNaira to track the financial transactions of its people.

Whether this is true or not, the fact remains that tracking fraudulent transactions with eNaira will no longer be difficult for security agencies.

However, if another issue like the #EndSars protest arises in the country, the government will use the same tactics to prevent the organizers from getting funds to power the project.

To sum it up

The Nigerian Central Bank Digital Currency is a welcome idea for attaining the next level of financial inclusion in the country. The initiative promotes cashless, reliable, and faster means of making payments via the internet in Nigeria.

After everything that happened in 2020 with the #EndSars, the probability of this project failing is high.

The Federal Government froze both personal and corporate bank accounts of so many young Nigerians involved in the protest as a means to stop the agitators getting funds to mobilize themselves.

Consequently, distrust broke out between the Federal Government and the youth of Nigeria.

Meanwhile, the acceptability level of eNaira by Nigerian youth is a major factor in sustaining the digital currency. Apart from the fact that more than half of the country’s overall population is youth, the major consumers of tech are youth.

eNaira as a centralized currency can be used to break into users’ privacy and witch hunt political opponents or any individual who has divergent opinions about the affairs of the country.

Creating such a big project at this critical moment requires much effort from the CBN to guarantee the privacy of the users and boost their trust.

Even so, it is no secret that Nigerian youth prefer non centralized means of sending and receiving money online. That is why cryptocurrency did very well in Nigeria despite the ban being placed on it by the Federal Government.

So, the major factor which is traceability will determine whether eNaira will actually be used.

But to be on a safer side, my suggestion to you is that having various means of sending and receiving money online is a smart move. So, in case the project does not eventually work, you will still have other means of making transactions online without any interruption.

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