Nigeria Limits Cash Withdrawals in CBDC Push

Nigeria’s central bank is capping cash withdrawals for individuals to $224 a week

article-image

Maksym Kapliuk/Shutterstock.com

share

The Central Bank of Nigeria is attempting to drum up the use of its central bank digital currency, or CBDC, by enforcing limits on the amount of cash citizens can withdraw from their local banks.

Nigeria’s central bank asked deposit banks and financial institutions to cap over-the-counter maximum cash withdrawals for individuals to $224 a week, in a directive issued on Tuesday, 

Corporate organizations’ free withdrawals will also be limited to $1,154 per week, the bank said. Withdrawals above those limits will attract processing fees of 5% and 10% respectively. 

“Customers should be encouraged to use alternative channels…to conduct their banking transactions,” the bank said. Those include internet banking, mobile banking apps, debit cards and the country’s CBDC, the eNaira, among other means.

Central Bank Governor Godwin Emefiele conceded in October that his institution couldn’t account for the use of 85% of Nigeria’s cash in circulation, Bloomberg reported. That, in effect, was jeopardizing monetary policy across the cash-hungry nation of Africa’s largest economy, he said at the time.

The West African nation has also struggled to deal with individuals hoarding cash as it attempts to counter illegal activity, including theft and kidnappings.

Under the directive, a $44 per day limit would apply to those individuals seeking to withdraw from ATMs while over-the-counter third-party checks exceeding $112 would not be accepted.

In rare circumstances, where individuals or organizations require cash for “legitimate” purposes, a limit of $11,226 and $22,452 will apply respectively. 

Those will also be limited to one withdrawal per month and subject to rigorous identification and document requests including presenting a driver’s license and approval by the bank authorizing the withdrawal, among other things.

Nigeria became the first African nation to launch a retail central bank digital currency in October 2021, with a design aimed at complementing physical cash but not replacing it entirely.


Start your day with top crypto insights from David Canellis and Katherine Ross. Subscribe to the Empire newsletter.

Explore the growing intersection between crypto, macroeconomics, policy and finance with Ben Strack, Casey Wagner and Felix Jauvin. Subscribe to the On the Margin newsletter.

The Lightspeed newsletter is all things Solana, in your inbox, every day. Subscribe to daily Solana news from Jack Kubinec and Jeff Albus.

Tags

Upcoming Events

Salt Lake City, UT

MON - TUES, OCT. 7 - 8, 2024

Blockworks and Bankless in collaboration with buidlbox are excited to announce the second installment of the Permissionless Hackathon – taking place October 7-8 in Salt Lake City, Utah. We’ve partnered with buidlbox to bring together the brightest minds in crypto for […]

Salt Lake City, UT

WED - FRI, OCTOBER 9 - 11, 2024

Permissionless is a conference for founders, application developers, and users. Come meet the next generation of people building and using crypto.

recent research

Blinks Report Image.png

Research

Blinks enable the ability to vampire attack user monetization of existing networks by inserting onchain and financialized functionalities directly within the popular social feeds and digital experiences of today.

article-image

Kalshi founder Tarek Mansour said Thursday marked the “the first trade on regulated election markets in nearly a century”

article-image

I was excited about being on the precipice of realigning societal incentives and solving many issues plaguing our modern financial world

article-image

Cypherpunk Holdings has rebranded to Sol Strategies in a pivot to a Solana-first investment approach

article-image

BitGo’s wrapped bitcoin (wBTC) has a new custodial challenger

article-image

Make no mistake: Tether makes a ton of money. But exactly how much depends a lot on the price of bitcoin.

article-image

A new report on stablecoin activity in emerging markets shows their immense popularity in Nigeria