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Central banks in more than 70 countries are presently studying or at advanced stages of developing their Central Bank Digital Currency (CBDC), which are digital representations of fiat currencies developed and issued by the apex banks.

In line with this, in Nigeria, the Central Bank of Nigeria (CBN) took a major step towards the launch of its own digital currency, commonly known as the e-Naira last week with its formal announcement of its engagement of global fintech company, Bitt Inc. as its technical partner for the project.

To choose the technical partner, the CBN went through a rigorous vendor selection process in line with the Public Procurement Act, conducted by seven departmental directors and a Deputy Governor whereby 15 companies were evaluated. The evaluation was based on the following criteria: technology ownership and control; implementation timeline; efficiency, ease of adoption; support for anti-money laundering and combating the financing of terrorism (AML/CFT); platform security; interoperability; implementation experience.

According to a document made available by CBN, from the evaluated 15 companies, Bitt came tops with an average score of 82.3 per cent. The scores for some other bidders were: Bitt- 82.3 per cent; InterStellar – 76.9 per cent; Zimbali- 76.4 per cent; G+D – 76.3 per cent; and EmTech -66.4.


InterStellar’s core technology is called STARGATE. Which is blockchain agnostic. Its primary blockchain is the Bantu Blockchain.

Indeed, technological advances in recent years which was further propelled by the COVID-19, have led to a growing number of fast, electronic means of payment available to consumers for everyday transactions.

Essentially, given their source, CBDCs are not decentralised but simply a digital token issued as the territory’s currency, regulated and backed by local monetary reserves, the report by Zerocap stated.

In addition, CBDCs may or may not utilise blockchain technology, depending on the frameworks used to implement the assets into circulation.

The Bank for International Settlement (BIS) noted in a report that there are various design choices for CBDCs, including: access (widely versus restricted); degree of anonymity (ranging from complete to none); operational availability (ranging from current opening hours to 24 hours a day and seven days a week); and interest bearing characteristics (yes or no). Furthermore, it points out that many forms of CBDCs are possible, with different implications for payment systems, monetary policy transmission as well as the structure and stability of the financial system.

Although CBDCs will probably not function precisely like paper notes or bitcoin, they will hold some digital features similar to physical cash. Assets will be easily transferable between entities and carry the same value in third-party wallets or platforms.

These properties also apply to their storage; CBDC users will store the tokens in their digital wallets and use the assets wherever they go. Citizens will most likely need to open an account with their central bank affiliations, but storage options will vary from mobile to desktop, online and offline anywhere on the planet.

With CBDCs, local or international transfers can occur almost instantly and require much lower fees than the traditional system. It will drastically minimise the task of verifying funds or risk-monitoring in each banking platform, since CBDCs are the actual fiat currencies in digital form.

Reducing fees at faster transfer rates will also promote economic growth and benefit lower classes through low payment fees and higher accessibility to funds.

Since CBDCs are issued through central banks and available to use through digital wallets, the unbanked may access and transfer their funds without the need for private bank accounts, which are often not at their disposal.


It will also benefit the underbanked through higher access to financial services with more straightforward frameworks and faster KYC. M-Pesa, a P2P payment platform released in Kenya, is a good example of such inclusion. Released in 2007, M-Pesa promoted easy payments and transactions without the need for private bank accounts. As a result, Kenya`s access to formal finance grew from 14 per cent in 2006, to 83 per cent in 2019.

Also, digital fiat creates more significant obstacles to illegal activities as physical cash allows funds to be hidden and transferred outside of surveilled financial systems.

CBN’s e-Naira Technical Partner

Bitt is a leader in the CBDC industry, with subject matter experts at the intersection of technology and policy. The company deployed its flagship product in regulated, collaborative, multi-stakeholder environments, including a live CBDC in four Caribbean countries, and digital currency deployments in Barbados and Latin America.

Findings also revealed that the Bitt DCMS for Eastern Caribbean Central Bank was vetted by the International Monetary Fund (IMF) and World Bank.

Also, the deployment in the Caribbean countries was driven by social impact, including financial inclusion, through special features for the unbanked, on/off-ramp through an accessible agency network, and the implementation of zero-cost mobile transactions. The systems has patent-pending offline transaction capabilities, and the ability to integrate with other CBDC networks for cross-currency exchange.

Overstock, which has majority stake in the company, is a more than 20 year old publicly traded company (Nasdaq: OSTK) with over $200M invested in blockchain technology related businesses. Pelion Ventures, a 35+ year old VC firm, manages OSTK investments. In addition, Bitt was the first company to digitise a national currency on a blockchain, thus creating the first synthetic CBDC, with the support of the Central Bank of Barbados Governor and the Minister of Finance.

“That system is still in operation today, and is integrated with the largest bill payment processor in the country and both major telcos.

“The Government of Barbados uses it to collect payments online. mMoney has grown to service thousands of merchants andmany more individuals within Barbados. It is clearly not a closed payment system.

“The main product, the Digital Currency Management System, licenced to CBN is not a closed payment system. The DCMS provides the Suite of applications for the monetary authority, commercial banks, merchants, and consumers (both, banked and unbanked),” a report stated.

Furthermore, Bitt’s market-proven Digital Currency Management System (DCMS) encompasses a core transaction network, Numa architecture (network abstraction layer), a secure minting system, and a Digital Currency Manager for the monetary authority or administrator of the system.


In addition, Bitt provides user interfaces for enterprises, merchants, and retail consumers that enable a variety of actions to achieve each users’ objectives in managing digital currency transactions and services. Bitt has built its DCMS to integrate with leading blockchain networks. Also, in 2015, Bitt started a project to digitise the Barbadian dollar.

Also, in March this year, ‘DCash’, was designed and developed by Bitt, in partnership with the Eastern Caribbean Central Bank (ECCB) and it became the world’s first retail central bank digital currency (CBDC) to be publicly issued within a formal currency union.

The historic transaction was the climax of over two years of extensive research, consultations, planning, software development, operational training, merchant acquisition, customer service, and marketing achieved through collaboration with the ECCB, Bitt and multiple external stakeholders.

CBN Optimistic about e-Naira

The CBN pointed out that the selection of Bitt from among highly competitive bidders was based on the company’s technical competence, efficiency, platform security, interoperability, and implementation experience.

“In choosing Bitt Inc. the CBN will rely on the company’s tested and proven digital currency experience, which is already in circulation in several Eastern Caribbean countries.

“Bitt Inc. was key to the development and successful launch of the Central Bank Digital Currency (CBDC) pilot of the Eastern Caribbean Central Bank (ECCB) in April 2021,” it explained.

Speaking on the selection process that saw Bitt emerge as the CBN’s preferred technical partner for the implementation of the CBDC from a group of 15 prospective technical partners, Nwanisobi emphasised that the Bank based its selection assessment on technology ownership and control; implementation timeline; efficiency, ease of adoption; support for anti-money laundering and combating the financing of terrorism (AML/CFT); platform security; interoperability; and implementation experience, among others.

“Bitt was the first company to digitise a national currency on a blockchain, thus creating the first synthetic CBDC, with the support of the Central Bank of Barbados Governor and the Minister of Finance. That system is still in operation today,” he explained.

While urging members of the public to embrace the e-Naira upon unveiling, in the forthcoming weeks, he also enjoined stakeholders to support the Bank’s policies, stressing that the CBN remained focused on its resolve of being a people-centered Central Bank.

Also, the CBN Governor, Mr. Godwin Emefiele expressed optimism that the e-Naira, would bring about increased cross-border trade, accelerate financial inclusion, and lead to cheaper and faster remittance inflow.

He said the digital money would lead to easier targeted social interventions, as well as improvement in monetary policy effectiveness, payment systems efficiency, and tax collection.

CBN’s Director, Corporate Communications Department, Mr. Osita Nwanisobi, explained that the e-Naira project had been a long and thorough process for the apex bank following its resolve in 2017, to digitise the local currency after extensive research and exploration.

Nwanisobi said CBN’s decision was in line with an unmistakable global trend in which over 85 per cent of central banks were considering adopting digital currencies in their countries.

On her part, the Director, Information Technology, CBN, Ms. Rakiya Mohammed, said every Nigerian would have access to the CBDCs when it is introduced.

She said: “Let me state categorically that cryptocurrency such as Bitcoin and the rest of them are not under the control of the central bank; they are purely private decisions that individuals make and are not part of this arrangement.

“We have spent over two years studying this concept of central bank’s digital currency and we have identified the risks. And it is one of the reasons why I said we are setting up a central governance structure that would involve all industry stakeholders to access all the risks as we continue on this journey.

“Very soon we would make an announcement on the date for the launch and by the end of the year, we should have the digital currency.”

According to her, about 80 per cent of central banks across the world are presently exploring the possibility of issuing the central bank’s digital currency, saying that Nigeria cannot be left behind.

Mohammed added: “You are aware that we have two forms of fiat money: The notes and the coins. So, the central bank’s digital currency is the third form of fiat money. So, this digital money is going to complement the cash and note that we have.

“The central bank digital currency will just be as good as you having cash in your pocket. So, if you are having the currency in your pocket, you are as good as having cash on your phone.

“Now, why did we need to go into this? There are different cases that the central bank is looking at. For instance, we have remittances, which is a huge market in Africa. We also know that in the last EFInA report, our target for this year was to achieve 80 per cent financial inclusion. We are about 60 per cent and at the rate we are going, it is unlikely we would meet this target. But the central bank digital currency would accelerate this target.”

She said it would support the cashless policy as well as innovation, adding that the central bank has a “very clear roadmap on this and we are about to move to the next stage of a proof of consent after which we would start a pilot.”

Commenting on the upcoming initiative, the Divisional Chief Executive at Interswitch Group, Mr. Akeem Lawal, recently described the move as a forward-looking policy initiative from the regulator’s perspective, adding that it will enhance the convertibility of the naira. He said digital currency would also help the country to benefit from the technology, which is the future of payments in every sphere of endeavour.

In his contribution, Managing Director/Chief Executive, SD&D Capital Management Limited, Mr. Idakolo Gbolade, stated that the impact of digital currency on the economy would yield positive results.

Therefore, it is expected that the introduction of the e-Naira will make payments and transfers easier, drastically help in reducing fraud and money laundering risks, among other positive benefits.

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