Nigeria bans ATM cash withdrawals over $225 a week to force use of CBDC

Nigeria has drastically reduced the magnitude of currency individuals and businesses tin retreat arsenic it attempts to propulsion its “cash-less Nigeria” argumentation and summation the usage of the eNaira — Nigeria’s Central Bank Digital Currency (CBDC).

The Central Bank of Nigeria issued the directive to fiscal businesses successful a Dec. 6 circular, noting that individuals and businesses would present beryllium constricted to withdrawing $45 (₦20,000) per time and $225 (₦100,000) per week from ATMs.

Individuals and businesses volition besides beryllium constricted to withdrawing $225 (₦100,000) and $1,125 (₦500,000) respectively astatine banks per week, with individuals deed with a 5% interest and businesses with a 10% interest for amounts supra those limits.

The maximum currency withdrawal via point-of-sale terminals is besides capped astatine $45 (₦20,000) per day. Announcing the changes the Director of Banking Supervision Haruna Mustafa noted:

“Customers should beryllium encouraged to usage alternate channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to behaviour their banking transactions.”

The limits are cumulative limits for each withdrawal, truthful an idiosyncratic withdrawing $45 from an ATM who past tries to retreat currency from a slope connected the aforesaid time would beryllium deed with the 5% work fee.

The erstwhile limits connected regular currency withdrawals anterior to the announcement were $338 (₦150,000) for individuals and $1,128 (₦500,000) for businesses.

Adoption rates for eNaira person been debased since its launch connected Oct. 25, 2021. As reported by Cointelegraph connected Oct. 26 the Central Bank of Nigeria has struggled to convince its citizens to usage the CBDC with little than 0.5% of the colonisation reported having utilized the eNaira arsenic of Oct. 25, a twelvemonth connected from its launch.

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Nigeria established its “cash-less” policy successful 2012, suggesting a displacement distant from carnal currency would marque its outgo strategy much efficient, trim the outgo of banking services, and amended the effectiveness of its monetary policy.

On Oct. 26 the Governor of Nigeria’s cardinal bank, Godwin Emefiele, noted 85% of each Naira successful circulation was held extracurricular of banks and arsenic a effect it would beryllium reissuing caller banknotes successful an effort to thrust the displacement towards integer payments.

According to a CBDC tracker from the American think-tank, Atlantic Council, Nigeria is 1 of 11 countries to person afloat deployed a CBDC, 15 different countries person launched aviator programs with India acceptable to join the ranks aboriginal this month.