To encourage the usage of CBDC, Nigeria has placed a weekly limit of $225 on the amount of cash that can be withdrawn from ATMs.
As part of its efforts to promote its "cash-less Nigeria" policy and encourage greater usage of the eNaira, the Central Bank of Nigeria's digital currency, Nigeria has significantly decreased the amount of cash that people and businesses are permitted to withdraw from ATMs (CBDC).
In a circular (1) dated December 6, the Central Bank of Nigeria released the mandate to financial businesses, noting that people and companies were now limited to removing $45 (20,000 nairas) per day and $225 (100,000 nairas) per week from ATMs. This restriction went into effect on December 6.
In addition, the amount of money withdrawn from banks each week will be capped at $225 (100,000 nairas) for people and $1,125 (500,000 nairas) for businesses. Individuals will be charged a fee of 5%, and corporations will be charged a fee of 10% for amounts higher than those restrictions.
A daily limit of $45 (or 20,000 nairas) is also imposed on the amount of money withdrawable from point-of-sale machines. Director of Banking Supervision Haruna Mustafa made the following remarks when she announced 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.”
Because the limits apply to the cumulative total of each withdrawal, an individual who takes $45 out of an ATM and then tries to take cash out of a bank on the same day will be subject to the 5% service fee.
Before the announcement, the restrictions on the amount of cash that may be withdrawn daily were $338 (or 150,000 yen) for individuals and $1,128 (or 500,000 yen) for corporations.
Not Many Takers of CDBC in Nigeria
Since its introduction on October 25, 2021, there has been a rather slow uptake of the eNaira digital currency. The Central Bank of Nigeria has failed to encourage its residents to use the CBDC. As of October 25, one year after the debut of the eNaira, less than 0.5% of the public admitted having used the digital currency.
In 2012, Nigeria implemented a policy (2) known as "cash-less," which proposed that the country should move away from using physical currency since doing so would increase the efficiency of its payment system, lower the cost of banking services, and make Nigeria's financial system more effective.
Godwin Emefiele, the governor of Nigeria's central bank, stated (3) on October 26 that 85 percent of all Naira in circulation was held outside of banks. As a result, the bank announced that it would be republishing new banknotes to drive the transition toward digital payment.
According to a CBDC tracker created by an American think group called the Atlantic Council, Nigeria is among 11 countries that have fully implemented a CBDC. In addition, 15 additional countries have begun pilot programs, and India is scheduled to join the ranks of these countries later this month.