The Central Bank of Nigeria announced that it has given recipients of diaspora remittances the opportunity to make payments using its digital currency, also known as the eNaira.
Nairametrics reported that the decision, according to the apex bank, is part of its efforts to liberalize the distribution of diaspora remittances.
This information is provided in the CBN’s circular, “Operational Framework for eNaira Payment Option to Recipients of Diaspora Remittances,” which was addressed to the public and signed by the bank’s Director of Trade and Exchange Department, Dr. Ozoemena Nnaji.
According to Nnaji, the circular’s instructions will make it easier to pay receivers who opt to pay with eNaira the earnings of diaspora remittances.
The Central Bank of Nigeria obliged the IMTOs to apply for a one-time “No-Objection” before paying out in enaira, according to the guidelines.
Additionally, “The bank must disclose the account information where foreign cash from IMTOs will be received.”
The CBN emphasized that receiving remittance earnings in eNaira remained an option and that the option to pay out in digital currency would occur simultaneously with the option to pay out in dollars.
According to the operating framework provided by the central bank, IMTOs are obliged to pre-fund the CBN account with foreign currency and open merchant wallets through the CBN.
As a result, the CBN will add the eNaira equivalent of the foreign money that the IMTO had previously pre-funded to the IMTO merchant wallet.
The CBN went on to say that the payment process entails a sender starting a diaspora transfer with an IMTO of their choosing abroad while supplying information about the beneficiary’s wallet.
When the beneficiary is credited with the eNaira equivalent of the foreign currency sent at the origin at the I&E window rate, the IMTO debits its eNaira merchant wallet.
According to the apex bank, “The alternative is for IMTO to connect to the eNaira portal from its platform using an API made available by CBN, and then start transferring the eNaira equivalent of the foreign currency sent at the origin at the I&E window rate.”
Former President Muhammadu Buhari introduced the CBN’s digital currency, the eNaira, on October 25, 2021, with the goal of promoting a more cashless, inclusive, and digital economy while enhancing the benefits of earlier monetary policy actions and rapidly expanding payments systems.
In his earlier remarks on the value of the eNaira in Africa’s largest economy, suspended CBN Governor Godwin Emefiele also listed a number of additional advantages, such as the facilitation of cross-border trade, financial inclusion, the effectiveness of monetary policy, increased payment efficiency, improved revenue tax collection, remittance improvement, and targeted social interventions.
The CBN has announced that eNaira transactions have increased to 63% despite their poor start.
According to the report, the value of eNaira transactions rose from N8 billion on 700,000 transactions recorded at the end of November 2022 to N22 billion as of March 2023. Since its inception in October 2021, almost 13 million e-wallets have been created.
