Nigeria’s push for CBDC via cash withdrawal limits further erodes anonymous transactions
(by Tim Hinchcliffe | TruthTalk.UK) – By limiting cash withdrawals, the Central Bank of Nigeria (CBN) is further eroding the ability to transact anonymously as it pushes the eNaira Central Bank Digital Currency (CBDC).
Launched in October, 2021, Nigeria’s CBDC has seen an abysmal adoption rate, with less than 0.5% of the population using the eNaira.
On Tuesday, Nigeria’s central bank instructed the country’s banks and other financial institutions to limit the amount of cash that individuals and organizations could withdraw both daily and weekly, while “encouraging” digital channels, such as the eNaira, which also has caps on daily transaction limits.
“Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions” — Central Bank of Nigeria, December 2022
Beginning January 9, 2023, over the counter weekly cash withdrawals will be limited to $225 (100,000 naira) for individuals and $1,124 (500,000 naira) for corporate organizations.
According to the CBN, “Withdrawals above these limits shall attract processing fees of 5% [for individuals] and 10% [for corporate organizations].”
Additionally, ATM and point of service withdrawals will be limited to only $45 (20,000 naira) per day.
According to the CBN, “Customers should be encouraged to use alternative channels (internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.) to conduct their banking transactions.”
But even the eNaira has different caps on daily transaction limits!
“The individual and merchant wallets of the eNaira have different caps on daily transaction limits and the amount of eNaira that can be held in them” — Central Bank Digital Currencies in Africa, BIS, November 2022