The Central Bank of Nigeria (CBN) has issued preliminary guidelines for its proposed e-naira digital currency.

In a sensitization document sent to commercial banks in the country, the CBN outlined several design features of the central bank digital currency (CBDC). According to the document seen by Cointelegraph, Nigeria’s CBDC is codenamed “Project Giant” and will be pegged to the value of the naira. Thus, the e-naira will offer parity of value but will not be an interest-bearing currency. The e-naira will run alongside the country’s fiat currency, with the CBN responsible for issuing, distributing and redeeming the digital currency among other monitoring and management functions.

Based on the sensitization document, Nigeria’s CBDC will function under a tiered Anti-Money Laundering and Know Your Customer (AML/KYC) structure with different transaction limits.

The bottom of the AML/KYC pyramid will reportedly encompass unbanked citizens who will be mandated to provide their national identity-linked phone numbers for verification. Users in this category will be limited to a daily transaction limit of 50,000 nairas (about $120).

Citizens with bank accounts can fall under the second and third tiers depending on the number of AML/KYC steps completed. These two levels will have daily limits of 200,000 nairas ($487) and 1 million nairas ($2,438), respectively.

Users of the third tier will likely have to complete a physical AML/KYC verification process in addition to the bank verification number requirements stipulated for tier two.

Users classified as merchants will also fall under the same 1-million-naira limit as tier three but will have no restrictions as to the amount they can send to their bank accounts.

Indeed, the CBN plans to ensure seamless transfers between e-naira wallets and bank accounts with no fees for several types of transactions. The zero-fee structure is likely a means to incentivize the adoption of the digital currency, especially amid complaints about the onerous transaction costs associated with mobile and digital banking in the country.