The Central Bank of Nigeria has limited the amount of cash that people and companies may withdraw in order to boost the usage of the eNaira, Nigeria’s Central Bank Digital Currency (CBDC).
In a circular sent to financial institutions on December 6, the Central Bank of Nigeria said that individuals and companies would henceforth be restricted to taking $45 (₦20,000) per day and $225 (₦100,000) each week from ATMs.
Individuals and corporations will also be restricted to withdrawing $225 (₦100,000) and $1,125 (₦500,000) every week from banks, with individuals charged a 5% fee and businesses charged a 10% cost for sums above those restrictions.
Cash withdrawals via point-of-sale (POS) terminals are similarly limited to $45 (₦20,000) every day. Haruna Mustafa, Director of Banking Supervision, said on announcing the changes:
“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 a person who withdraws $45 from an ATM and then attempts to withdraw cash from a bank on the same day would be charged a 5% service fee.
Prior to the announcement, the daily cash withdrawal limitations for people were $338 (₦150,000) and $1,128 (₦500,000).
Since its inception on October 25, 2021, eNaira adoption has remained poor. As previously noted, the Central Bank of Nigeria has failed to persuade its people to utilize the CBDC, with fewer than 0.5% of the population using the eNaira as of Oct. 25, a year after its inception.
Nigeria implemented its “cash-less” policy in 2012, implying that moving away from physical currency would increase the efficiency of its payment system, lower the cost of banking services, and improve the efficacy of its monetary policy.
On Oct. 26, Nigeria’s central bank Governor, Godwin Emefiele, said that 85% of all Naira in circulation was stored outside of banks and that as a consequence, the central bank will be reissuing fresh banknotes in an attempt to push the transition toward digital payments.
According to the Atlantic Council’s CBDC tracker, Nigeria is one of 11 nations that have completely implemented a CBDC, while 15 additional countries have initiated test programs, with India due to join the ranks later this month.
