Nigeria bans ATM cash withdrawals to force use of CBDC | The Financial Express

Nigeria bans ATM cash withdrawals to force use of CBDC

On October 26, Godwin Emefiele, the governor of Nigeria’s central bank, stated that 85% of all Naira in circulation was held outside of banks

Nigeria bans ATM cash withdrawals to force use of CBDC
Additionally, there will be a weekly withdrawal cap for both individuals and businesses of $225 (100,000 nairas) and $1,125 (500,000 nairas), respectively.

In an effort to advance its “cash-less Nigeria” policy and promote the use of the eNaira, Nigeria’s central bank’s digital currency, the country has drastically reduced the amount of cash that individuals and businesses can withdraw (CBDC), as reported by Cointelegraph.

Cointelegraph further noted that the circular, the Central Bank of Nigeria stated that individuals and businesses would now be restricted to withdrawing no more than $45 (20,000 Nigerian naira) per day and $225 (100,000 naira) per week from ATMs.

Additionally, there will be a weekly withdrawal cap for both individuals and businesses of $225 (100,000 nairas) and $1,125 (500,000 nairas), respectively. Any amounts taken out in excess of those limits will incur a 5% fee for individuals and a 10% fee for businesses.

The limits 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.

Prior to the announcement, the daily cash withdrawal caps for individuals were $338 (150,000 naira) and businesses were $1,128 (500,000 naira).

Nigeria implemented its “cash-less” policy in 2012 with the justification that doing so would improve the efficiency of its payment system, lower the cost of banking services, and increase the efficacy of its monetary policy. On October 26, Godwin Emefiele, the governor of Nigeria’s central bank, stated that 85% of all Naira in circulation was held outside of banks and that as a result, new banknotes would be issued in an effort to promote the transition to digital payments.

Nigeria is one of 11 nations that have fully implemented a CBDC, according to a tracker created by the American think tank Atlantic Council. Another 15 nations have started pilot projects, and India is expected to follow soon after, Cointelegraph noted.

(With insights from Cointelegraph)

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First published on: 08-12-2022 at 14:06 IST