The Central Bank of Nigeria (CBN) has issued a directive to financial businesses in the country, limiting the amount of money that individuals and businesses can withdraw from ATMs.
Under the new rules, individuals will be limited to withdrawing $45 (₦20,000) per day and $225 (₦100,000) per week from ATMs, while businesses will be limited to $225 (₦100,000) per week.
These limitations on cash withdrawals are intended to encourage the adoption of the eNaira, Nigeria’s central bank digital currency (CBDC).
However, the adoption of the eNaira has been low, with less than 0.5% of the population reported to have used it.
The CBN’s directive also includes limits on bank withdrawals and point-of-sale purchases. These limits are cumulative, meaning that the total amount of money that an individual or business can withdraw from an ATM in a given week will be limited to $225 (₦100,000). Additionally, individuals who exceed the withdrawal limits will be subject to a 5% fee, while businesses will be subject to a 10% fee for amounts above the limits.
It is not uncommon for governments to take steps to encourage the adoption of their national digital currencies. However, the approach taken by the CBN in Nigeria has sparked debate and discussion among experts and the general public.
Some argue that forcing adoption through limitations on cash withdrawals is not the most effective approach, and that there may be other methods that could be more successful in increasing the adoption of the eNaira. Others argue that the CBN’s approach is necessary in order to promote the use of the eNaira and reduce the country’s reliance on physical cash.
In a statement, the CBN justified the new rules by saying that they are necessary in order to “encourage a cashless economy and promote financial inclusion.” It remains to be seen how effective the CBN’s new rules will be in increasing the adoption of the eNaira.
However, the discussion around the use of CBDCs and the best approaches to promoting their adoption is an important one, and one that will continue to be relevant as more and more countries consider launching their own digital currencies.
Moritz Pindorek (Moritzpindorek.com)
Social Media, Marketing & Blockchain
Crypto/Web 3 Advisor, Top 10 Crypto Influencer 2022(Forbes Monaco) & Top 10 Entrepreneur 2022 (Forbes Monaco)
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