Nigeria Limits ATM Cash Withdrawals Of $225 A Week To Promote CBDC

The Central Bank of Nigeria put these limits in place as part of a larger effort to get people to use digital money transfers.

Nigeria has made it much harder for people and businesses to get cash as part of its “cash-less Nigeria” plan and to get more people to use the eNaira, which is Nigeria’s Central Bank’s digital currency (CBDC).

In a circular sent to financial businesses on Dec. 6, the Central Bank of Nigeria told them that people and businesses could only withdraw $45 (₦20,000) per day and $225 (₦100,000) per week from ATMs.

People and businesses will only be able to take out $225 (₦100,000) and $1,125 (₦500,000) from banks per week, respectively. If they take out more than that, people will have to pay a 5% fee and businesses will have to pay a 10% fee.

The most cash you can take out of point-of-sale machines each day is also $45 (₦20,000). When Director of Banking Supervision Haruna Mustafa talked about the changes, she said:

“Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”

The limits for each withdrawal add up, so a person who takes out $45 from an ATM and then tries to take out cash from a bank on the same day would be charged the 5% service fee.

Before the announcement, the daily limits for cash withdrawals were $338 (₦150,000) for people and $1,128 (₦500,000) for businesses.

Since it came out on October 25, 2021, not many people have used eNaira. The Central Bank of Nigeria has had a hard time getting people to use the CBDC. As of Oct. 25, a year after its launch, less than 0.5% of the population had used the eNaira.

Nigeria started its “cash-less” policy in 2012, with the idea that getting rid of physical cash would improve the efficiency of its payment system, lower the cost of banking services, and make its monetary policy work better.

On Oct. 26, the Governor of Nigeria’s central bank, Godwin Emefiele, said that 85% of all Naira in circulation was held outside of banks. As a result, the bank would be reissuing new banknotes to encourage the move toward digital payments.

According to a CBDC tracker from the American think tank Atlantic Council, Nigeria is one of 11 countries that have fully implemented a CBDC. Fifteen other countries have started pilot programs, and India will join them later this month.