e-Naira: CBN owns stake in Bitt
The Central Bank of Nigeria plans to take a stake in Bitt Inc., the Barbados-based fintech that was selected as a technical partner in the creation of the e-Naira.
According to a report by Nairametrics, citing “reliable sources within the Central Bank,” one of the conditions the top bank considered for accepting Bitt Inc, the company to register as a limited liability company in Nigeria, and the central bank to own shares in its Nigerian entity.
The Central Bank of Nigeria has announced that it will acquire Bitt Inc. has selected “among highly competitive bidders” and will depend on the fintech to realize its naira digitization plans. There were more than 100 bidders for the project, made up of local and foreign potential partners, but the CBN dealt with a foreign company, Bitt Inc., over claims that the company has experience implementing it in 5 countries, including the Bahamas.
The top bank has a long-standing policy of being a shareholder in various backbones of financial payment services such as NIBSS, NEFT etc. CBN believes that its leading role in enabling an electronic banking system will make the country’s financial system one of the most advanced in the world.
CBN’s decision has also drawn criticism from economists and fintech operators in Nigeria, who believed the contract should have been awarded to a local company. Since Nigeria is one of 4 African countries to print their paper money locally, many have attributed the CBN’s decision as eroding to the country’s fiscal strength. Most countries around the world rely on third parties to print their currencies.
According to the report, Bitt’s role is to help store and distribute the digital currency, while local FinTech firms are expected to help build other capabilities, such as using e-Naira to help with money transfers, a main objective of the project.
The CBN expects the e-Naira to be the backbone for various digital financial transactions in Nigeria, such as enabling utility payments, helping the government collect taxes and facilitating e-commerce.