Nigeria’s Central Bank Digital Currency (CBDC) was among the initiators to be issued by an African country.
The central bank of Nigeria has lately established a new policy that will hopefully encourage more people to use the electronic currency, the e-naira.
As a result of the CBN’s latest policy, the availability of actual currency to individuals and companies will be drastically reduced. In accordance with the new regulations, Nigerians are restricted to withdrawing $45 (N20,000) each day and $225 (N100,000) every week from atm.
A fee of 5% would be assessed to individuals and a fee of 10% would be assessed to businesses for withdrawals in excess of the stated limits.
In addition, the daily limit for cash withdrawals at point-of-sale terminals has also been capped at $45 by the central bank (N20,000).
Larger cash withdrawals, however, are discouraged by the CBN except “in compelling circumstances,” and are capped at N5 million ($6,765) for individuals and N10 million ($13,513) for businesses.
The monetary authority of Nigeria further clarified that monthly exemptions are all that are permissible.
According to Haruna Mustafa, director of banking supervision, the reforms will motivate Nigerians to look into alternative banking options and reduce their dependence on cash.
“Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”
Nigeria CBDC Attracts Global Attention
Many crypto specialists in November last year were worried that the level of distrust between the government of Nigeria and its citizens would doom the country’s CBDC project, e-Naira.
It was also reported in September that Nigeria’s government and Binance Holdings Ltd., the largest cryptocurrency exchange platform in the world, are in negotiations to establish a digital economic zone in Nigeria to facilitate the rapid adoption of blockchain technology by local businesses.