Nigeria is endeavoring to advance its cash-less policy as well as the usage of the country’s Central Bank Digital Currency – eNaira. In this respect, the country has suddenly restricted the cash amount to be withdrawn by businesses and individuals.
As per a circular that the Central Bank of Nigeria released recently, businesses, as well as individuals, are allowed to withdraw just $45 (approximately 20,000 Naira) per day from ATMs.
Nigeria Enacts ATM Withdrawal Limitations and Extra Charges to Push Public toward eNaira
In addition to this, the weekly ATM withdrawals are limited to $225 (nearly 100,000 Naira). The individuals who withdraw more than the authorized limit will be charged with 5 percent charges over withdrawals above $225. While the charges implemented on the corporations for withdrawing above $1,125 per week would be ten percent. $45 is the daily capitalization on the cash withdrawals via point-of-sale terminals.
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Haruna Mustafa, Nigeria’s Director of Banking Supervision, remarked on respective changes by saying that the consumers should be persuaded to utilize substitutive means to carry out their banking transfers. As per him, those means take into account mobile banking apps, internet banking, USSD, eNaira, cards/POS, and so on.
The current restrictions are absolute, signifying that if a person withdraws forty-five dollars from an ATM and then – on the same day – attempts to extract funds from a bank would be liable to pay services charges (up to 5%). In advance of the declaration, the regular cash capitalizations for the enterprises and individuals were $1,128 ($500,000) and $338 ($150,000) respectively.
Merchants and retailers in Nigeria could take benefit from the spreading worldwide trend related to payments in cryptocurrencies by persuading the country to embrace digital currency rather than cash payments.
Apart from stringently restricting cash usage, the latest regulations – which are to be implemented from the 9th of 2023’s January – are included in the endeavors of Nigeria to push the citizens toward more usage of the eNaira.
eNaira is a central bank digital currency that Nigeria has recently launched. It was formerly introduced in 2021 however the sluggish customer adoption became a cause its halt then.
Since the 25th of October last year, when eNaira got initially launched, the performance of the adoption rates was very low. As per the reports, the users of the CBDC comprised just 0.5% of the country’s cumulative population as of the same date of the current year.
This signifies that the Nigerian central bank had been facing considerable trouble while trying to take the residents toward the CBDC adoption. Back in 2012, the cashless policy was implemented by Nigeria.
The country justified its stance by saying that this would enhance its payment system’s competence in addition to minimizing the charges against banking services as well as increasing the monetary policy’s effectiveness.
More Countries Enter the CBDC Race despite Citizens’ Lack of Interest
Nigeria is categorized among the eleven countries that have completely executed their CBDC projects, as per a tracker developed by Atlantic Council (a think tank based in America). Another fifteen countries have begun their experimental projects while India will be another participant in the respective race shortly.
These endeavors do not seem to be much promising as the common masses appear to be uninterested to adopt centralized digital currencies at a time when several other decentralized substitutes are freely available.