Enaira, Nigeria's central bank's digital currency, launched a pilot in October to get banks to shut down crypto exchanges

The Government of Nigeria has officially announced that the Central Bank's (CBN) digital currency (CBDC) project, eNaira, will enter a pilot phase in time for the country's 61st anniversary of independence on October 1. Among them, the central bank of China (CBN) has chosen bittin Inc., a fintech company from Central America and the Caribbean, as its blockchain technology partner for the issuance of the central bank's digital currency CBDC. Headquartered in The Caribbean island of Barbados,

is a startup engaged in blockchain payments. According to CBN, Bitt's experience in the development of the Eastern Caribbean Central Bank's DCash digital currency project was an important factor in their choice of the company.

CBN indicated that it may seek to use Bitt's CBDC management protocol to establish its eNaira CBDC project. In late August, CBN sent a publicity document to the country's commercial banks detailing the proposed operation model for the eNaira project, according to Cointelegraph. Nigeria's CBDC, known as Project Giant, is intended to be a complementary form of fiat currency in the country, so eNaira will be pegged to the naira, maintaining the same value at 1:1, but will be a non-interest-bearing CBDC. In the draft guideline, THE CBN also proposed a tiered structure for CBDCS, in which the central bank would first provide services to financial institutions and government agencies, which in turn would provide central bank digital currencies to merchants and consumers. For AML/KYC systems, CBDC will adopt a tiered authentication model with transaction limits attached to each level. Tier 1 (unbanked) must provide a nationally verified phone number and other identification to qualify, with a daily transaction limit of 50,000 naira ($120).

bank account holders will belong to Layers 2 and 3, the difference between the two layers is the degree of authentication. The daily transaction limits for tier 2 and tier 3 are 200,000 naira ($487) and 1 million Naira ($2,438), respectively." Users classified as merchants by

will also be subject to the same n1m limit as tier 3, but there will be no limit on the amount they can send to their bank accounts per day.

In fact, CBN plans to ensure seamless transfers between eNaira wallets and bank accounts, and does not charge any fees for many types of transactions. A zero-fee structure could be one way to encourage the adoption of CBDCS, especially as people complain about the onerous transaction costs associated with online payments in the country." Notably, it was reported in February that the Central Bank of Nigeria (CBN) sent a warning letter to all financial institutions in the region, demanding the immediate closure of all bank accounts associated with cryptocurrency trading platforms. Banks or financial institutions that fail to comply with the directive will be severely punished.

CBN said in a statement that the letter merely reiterates its position since 2017 that the use, holding and trading of cryptocurrencies is prohibited by local financial institutions and reminds people that cryptocurrencies are not legal fiat currency in Nigeria. The country's legal tender, the Naira, continues to depreciate and the price continues to hit new lows, falling 52.12% from $0.0050 in June 2016 to $0.00239 as of press time today, according to TradingView. The central bank has also imposed stricter foreign exchange restrictions, prompting local people to seek new ways to preserve their assets. In addition, as the CBDC is seen as the national government's response to global cryptocurrencies and private staboins, there are concerns that Nigeria may see more cryptocurrency coercion.