In a bid to enhance the payout of diaspora remittances, the Central Bank of Nigeria (CBN) has unveiled its digital currency, eNaira, as a new payment option for recipients. The move is part of the CBN’s efforts to liberalize the remittance process and provide greater convenience for beneficiaries.
The CBN’s decision to introduce the eNaira as a payment alternative was disclosed in a circular titled “Operational Framework for eNaira Payment Option to Recipients of Diaspora Remittances.” The circular, signed by Dr. Ozoemena Nnaji, the Director of the Trade and Exchange Department, was addressed to International Money Transfer Operators (IMTOs) and the general public.
According to the guidelines outlined in the circular, recipients now have the option to choose the eNaira as their preferred method of payment for diaspora remittances. The eNaira payout will run concurrently with the existing dollar payout system, providing individuals with increased flexibility in receiving their funds.
To facilitate the implementation of this new payment option, IMTOs are required to apply for a one-time “No-Objection” approval from the CBN to carry out eNaira payouts. The CBN will also provide the necessary account details to receive foreign currency from the IMTOs.
However, the CBN emphasized that the receipt of diaspora remittance proceeds in eNaira is entirely optional. Individuals can still opt for the traditional dollar payout method if they prefer. The introduction of the digital currency serves as an additional choice for recipients, expanding the range of options available to them.
Explaining the operational framework, the CBN stated that IMTOs need to open merchant wallets through the CBN and pre-fund these accounts with foreign currency. Subsequently, the CBN will credit the IMTO merchant wallet with the equivalent amount in eNaira based on the earlier pre-funded foreign currency.
To initiate a diaspora transfer, senders will provide the beneficiary’s wallet details to their chosen IMTO overseas. The IMTO will then access the eNaira web wallet portal, debiting their eNaira merchant wallet and crediting the recipient with the Nigeria digital currency equivalent of the foreign currency sent. The conversion rate will be based on the Investors’ and Exporters’ (I&E) window rate.
Alternatively, IMTOs can integrate with the eNaira portal via an Application Programming Interface (API) provided by the CBN. This integration allows them to initiate the transfer of the eNaira equivalent of the foreign currency sent, based on the I&E window rate, directly from their platform.
The introduction of Nigeria digital currency as a payment option for diaspora remittances demonstrates the CBN’s commitment to leveraging digital innovation in the financial sector. By providing an additional method for remittance recipients, the CBN aims to streamline processes and enhance financial inclusion, ultimately contributing to the country’s economic growth and development.
As Nigeria’s digital currency gains momentum, it is expected to play a significant role in Nigeria’s financial landscape, promoting secure and efficient digital transactions and transforming the remittance ecosystem for the benefit of Nigerians at home and abroad.