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Nigeria Authorities Caps ATM Withdrawals to Entice CBDC Uptake

Nigeria Central Bank restricted weekly ATM withdrawals to $225 to enhance the uptake of CBDC in digital transactions. The drastic reduction in the withdrawable amount aims at orienting Nigeria to a cashless economy. Besides, the cap aims to encourage Nigerians to embrace eNaira- the country’s digital currency (CBDC). 

Circular Restricts Daily and Weekly Withdrawals

The issuance of the directive via a circular dated December 6 directed businesses to embrace the daily withdrawal cap of $45, translating to ₦20,000. Also, the circular limited the weekly withdrawal to $225, translating to ₦100,000.

The circular indicated that businesses executing over-the-counter withdrawals are capped at $1,125, being ₦500,000 weekly. On the other hand, individuals will have their allowable limit set at $225 translation to ₦100,000 weekly. Nevertheless, the circular noted that withdrawals exceeding the caps would attract a 5% and 10% fee for individuals and businesses, respectively. 

Understanding the Allowable Limits

The head of the banking supervision unit Haruna Mustafa restated that point-of-sale terminals can only dispense a maximum of $45 being, ₦20,000 in a single transaction. Mustafa encouraged customers to consider alternative channels, including USSD, eNaira, mobile, and internet banking, to cash-based withdrawals. 

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Mustafa clarified the new caps are cumulative limits where a 5% service fee is imposed on an individual whose daily over-the-counter and ATM transaction exceeds $45. 

The recent caps on cash withdrawal;e revises previous limits of $338 for individuals translating to ₦150,000 daily and $1,128 yielding ₦500,000 for business transactions.  

The latest adjustment traces the admission of low eNaira adoption rates since its introduction in October 2021. The Central Bank confessed its struggle to convince Nigerians to embrace CBDC. The Central Bank noted that only 0.5% of the nationals had used the eNaira since its introduction a year ago.  

Reasons for Cashless Payments

The country’s central bank governor Godwin Emefiele echoed previous sentiments that the cashless policy traces to 2012. Emefiele revealed the cashless policy would make payments efficient, lower banking services costs, and enhance monetary policy effectiveness.  

The circular reiterated the October 26 report that 85% of e-Naira were circulating outside the banking ecosystem. This discovery is prompting banknotes’ re-issuance to drive digital payments’ uptake. 

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The Atlantic Council commends Nigeria as among the few countries with fully developed CBDCs, with another 15 still locked in pilot programs. The American think-tank acknowledged India is soon issuing its pilot CBDC. 


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Stephen Causby

Stephen Causby is an experienced crypto journalist who writes for Tokenhell. He is passionate for coverage in crypto news, blockchain, DeFi, and NFT.

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