To further its “cash-less Nigeria” strategy and promote the usage of the eNaira, Nigeria’s central bank’s digital currency, the country has dramatically curtailed the amount of cash that people and companies may withdraw (CBDC).
According to a Dec. 6 circular from the Central Bank of Nigeria, people and companies are now only permitted to withdraw $45 (20,000 Nigerian naira) per day and $225 (100,000 naira) each week from ATMs. Additionally, there will be a weekly withdrawal cap for both people and businesses of $225 (100,000 nairas) and $1,125 (500,000 nairas), respectively. Any monies taken out over those restrictions would incur a 5% fee for individuals and a 10% cost for corporations.
The daily cap for cash withdrawals from point-of-sale terminals is also $45 (20,000 naira). Announcing the changes, the director of banking supervision Haruna Mustafa noted that customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.
The restrictions are cumulative for each withdrawal, so someone who withdraws $45 from an ATM on the same day and then tries to withdraw money from a bank will be charged a 5% service fee. Before the announcement, the daily cash withdrawal caps for individuals were $338 (150,000 naira) and for enterprises were $1,128 (500,000 naira).
Strategies to Force Adoption of eNaira
Since the 25th of October 2021, when the eNaira was launched, adoption rates have been poor. Less than 0.5% of the populace reported using the eNaira as of October 25, one year after its inception, and the Central Bank of Nigeria has failed to persuade its people to utilize the CBDC.
Nigeria implemented its “cash-less” policy in 2012 with the justification that doing so would enhance the efficiency of its payment system, lower the cost of banking services, and increase the efficacy of its monetary policy. Nigeria is one of the 11 nations that have completely implemented a CBDC, and India is about to follow suit, according to a CBDC tracker.