The country has significantly lowered the amount of cash that individuals and businesses can withdraw to push its "cash-less Nigeria" policy and increase the use of the eNaira — its Central Bank Digital Currency (CBDC).

The Central Bank of Nigeria approved the directive to financial institutions in a circular on December 6, noting that individuals and companies would now be limited to withdrawing $45 (20,000) per day and $225 (100,000) per week from ATMs.

Individuals and businesses will also be restricted to withdrawing $225 (100,000) and $1,125 (500,000) per week from banks, with individuals charged a 5% fee and businesses charged a 10% fee for amounts exceeding those limits.

Cash withdrawals from point-of-sale terminals are also limited to $45 (20,000) per day. Haruna Mustafa, Director of Banking Supervision, stated when announcing the changes:

The limits are cumulative for each withdrawal, so a person who withdraws $45 from an ATM and then attempts to withdraw cash from a bank on the same day will be charged a 5% service fee.

Before the announcement, individuals' daily cash withdrawal limits were $338 (150,000) and $1,128 (500,000).

Since its launch on October 25, 2021, eNaira adoption has been low. According to Cointelegraph on October 26, the Central Bank of Nigeria has struggled to persuade its citizens to use the CBDC, with less than 0.5% of the population using the eNaira as of Oct. 25, a year after its launch.

Nigeria implemented its "cash-less" policy in 2012, implying that moving away from physical cash would improve the efficiency of its payment system, lower the cost of banking services, and increase the effectiveness of its monetary policy.

On Oct. 26, Nigeria's central bank Governor, Godwin Emefiele, stated that 85% of all Naira in circulation was held outside of banks and that, as a result, the central bank would be republishing new banknotes to accelerate the shift to digital payments.

According to the Atlantic Council's CBDC tracker, Nigeria is one of 11 countries that have fully deployed a CBDC, with 15 other countries launching pilot programs and India expected to join the ranks later this month.

 Do you think more countries will adopt a CBDC in the future? Drop your comments by sharing this article on social media.

Posted 
Dec 7, 2022
 in 
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