How Bitt Emerged CBN’s Technical Partner on Digital Currency

•Came out tops among evaluated five

Obinna Chima

Fresh facts have emerged about the process leading to the Central Bank of Nigeria’s (CBN) formal engagement of global fintech company, Bitt Inc. as its technical partner for its proposed digital currency, also known as e-Naira.

THISDAY learnt yesterday that 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 seen by THISDAY, 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

It also revealed that a sandbox evaluation followed the selection process to have a hands on experience with Bitt and G+D being the two companies among the top five who had either gone live or had deployed a pilot.

Bitt is a leader in the Central Bank Digital Currency (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.

THISDAY 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),” it added.

A separate report also revealed that in March this year, ‘DCash’, was designed and developed by the international fintech company, 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.

Speaking at the virtual launch, Bitt’s CEO, Brian Popelka, had said, “CBDCs are truly transforming the way that financial transactions are conducted around the world. This change brings significant benefits especially to emerging economies.”

CBN Governor, Mr. Godwin Emefiele had said the CBDC, otherwise known as the e-Naira, would bring about increased cross-border trade, accelerate financial inclusion, and lead to cheaper and faster remittance inflow.

He had 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, in a statement, 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.

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

The statement said, “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.”

Emefiele had recently hinted that a national digital currency would be launched in October. The apex bank had also said the digital currency would be treated as a critical national infrastructure to protect it from operational and cyber-security risks.