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Nigeria imposes USD 45 limit on cash withdrawals

Thursday 8 December 2022 10:39 CET | News

Nigeria has imposed a limit of USD 45 on cash withdrawals in a move to push consumers towards alternatives, including its own Central Bank Digital Currency (CBDC), the eNaira.

 

In a letter to banks and other financial institutions, the Central Bank of Nigeria (CBN) applied new limits on over-the-counter withdrawals at just USD 225 per week for individuals and USD 1.123 for businesses.

Taking cash out of ATMs will be capped at USD 45 per day, with only USD 0.45 notes and smaller denominations being available from the machines. Customers will still be able to take out larger sums in some instances but will have to pay processing fees of between 5% and 10%. The move was justified in the letter as being in line with the Cashless policy of the CBN.

The central bank’s director of Banking Supervision Haruna B. Mustafa wrote that customers should be encouraged to use alternative channels such as internet banking, mobile banking apps, USSD cards/POS, eNaira, and others to conduct their banking transactions. The eNaira was launched in October 2021, but less than 0.5% of Nigerians are thought to be using it. 

The percentage is significantly smaller when compared to the estimates for the percentage of residents holding or trading cryptocurrencies, which range from 27% to more than 50% despite the country’s ban on crypto.

Nigeria has imposed a limit of USD 45 on cash withdrawals in a move to push consumers towards alternatives, including its own Central Bank Digital Currency (CBDC), the eNaira.

 

Nigeria’s path to a digitised society

Having a look at the latest fintech moves in Nigeria in November 2022 one can see why the country is considered one of the most digitally advanced in the region. US-based Meta launched its first Metaverse experience in Africa to help Nigerian creators explore new ways to connect with their communities.

The company introduced the ‘Flex Naija’ experience as part of a mixed-reality concert in Lagos, Nigeria. The company brought together content creators from fields such as music, fashion, art, and comedy, and allowed guests to be a part of a multi-sensory experience with different zones dedicated to key Metaverse entry points.

When it comes to mobile banking, Nigeria-based fintech Flutterwave launched a $end mobile app looking to facilitate fast and easy funds’ transfer from the diaspora to the African continent. Available on both Play Store and App Store, the app aims to enhance the customer experience through means of improved speed, transparency, and ability to send user’s money to the selected destination despite any hurdles that might be encountered.

Another local company, Paga, has rolled out a Visa-branded card to offer consumers the option of paying with both Virtual and physical cards. The decision to launch with a virtual naira card first is deliberate. Nigeria is a large market for Paga, and there has been a demand for virtual cards that work effectively.


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Keywords: cryptocurrency, central bank, stablecoin, digital currency
Categories: DeFi & Crypto & Web3
Companies:
Countries: Nigeria
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DeFi & Crypto & Web3