The Central Bank of Nigeria (CBN) has chosen Bitt Inc., a Barbados-based fintech firm, as the technical partner for its Central Bank Digital Currency, dubbed eNaira, which is set to launch later this year.
Bitt was chosen from a pool of highly competitive bidders for its technological expertise, efficiency, platform security, interoperability, and implementation experience.
CBN will choose Bitt based on the company’s proven and tested digital currency experience, which is already in use in several Eastern Caribbean countries. Bitt was instrumental in the development and successful launch of the Eastern Caribbean Central Bank’s (ECCB) CBDC pilot in April 2021.
The CBDC will enable increased cross-border trade, accelerated financial inclusion, cheaper and faster remittance inflows, easier targeted social interventions, and improvements in monetary policy effectiveness, payment system efficiency, and tax collection, according to CBN Governor Godwin Emefiele.
When compared to existing mechanisms such as wire transfers, cheques, inter-bank transfers, bill payment, and so on, CBDCs enable lower-cost transactions, lowering the overall cost of doing business.
Following the bank’s decision to digitize the Naira in 2017, the Nigerian CBDC pilot, dubbed Project Giant, was the result of extensive research and explorations. More than 85 percent of Central Banks are now considering adopting digital currencies in their countries, prompting the CBN’s decision.
CBDCs are expected to save Central Banks up to 90% on the costs of minting and issuing physical notes and coins, as well as secure transportation, storage, and distribution, as well as the collection and replacement of damaged notes and coins.
The cryptographically produced digital currencies can also be traced because they have their own digital serial number and watermark, which Central Banks can track and audit. Each transaction is recorded and can be viewed and tracked in real time, making it easier to comply with anti-money laundering (AML) and counter-terrorist financing (CFT) regulations.
Every transaction taking place in CBDCs is instantaneously verified for authenticity on blockchain’s distributed ledger, and it will not be processed unless it is issued by the Central Bank.
Bitt’s Central Bank Management Panel software is designed to provide detailed information and reports on transaction activity in real time, including the number of transactions, transaction speed, and money circulation velocity. This enables central banks to precisely monitor the impact of monetary policy actions and make adjustments as needed.