Nigeria has drastically reduced the amount of money individuals and businesses can withdraw as it tries to push its ‘cashless Nigeria’ policy and increase the use of eNaira – the digital currency of the Central Bank of Nigeria (CBDC).
The Central Bank of Nigeria Published the directive to financial firms in a December 6 circular, noting that individuals and businesses 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 limited to withdrawing $225 (₦100,000) and $1,125 (₦500,000) from banks per week respectively, with individuals hitting a 5% fee and businesses a 10% fee for amounts above these limits.
Maximum cash withdrawal through POS terminals is also capped at $45 (₦20,000) per day. Announcing the changes, Director of Banking Supervision, Haruna Mustafa, noted:
“Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to complete their banking transactions.”
The limits are cumulative limits for each withdrawal, so someone withdrawing $45 from an ATM who then tries to withdraw money from a bank on the same day would be hit with a 5% service charge.
Previous limits on daily cash withdrawals before the announcement were $338 (₦150,000) for individuals and $1,128 (₦500,000) for businesses.
eNaira adoption rates have been low since its launch on October 25, 2021. As Cointelegraph reported on October 26, the Central Bank of Nigeria has had a hard time convincing its citizens to use the CBDC, with less than 0.5% of the population reporting having used eNaira as of October 25, a year after its launch.
Related: The impact of CBDCs on stablecoins with Bitget’s Gracy Chen
Nigeria has introduced its “cash-less” Politics in 2012, suggesting that moving away from physical cash would make its payment system more efficient, reduce the cost of banking services, and improve the effectiveness of its monetary policy.
On October 26, the governor of the central bank of Nigeria, Godwin Emefiele, Noted 85% of all Naira in circulation was held outside banks and therefore it would reissue new banknotes in a bid to support the shift to digital payments.
According to a CBDC tracker from the American think-tank Atlantic Council, Nigeria is among 11 countries to have fully deployed a CBDC, 15 other countries have launched pilot programs with India ready to join the ranks later this month.