Governments from every country in the world were working to develop their own Central Bank Digital Currencies (CBDC). Nigeria was one of the first countries to implement a CBDC. The eNaira makes its debut in 2021. The government has, however, been forced to artificially encourage adoption as a result of the lack of adoption.
Nigeria recently declared that it will reduce the total amount of cash that both businesses and people could withdraw. According to reports, this was accomplished in light of the nation’s “cash-less Nigeria” policy, which was launched in 2012. The most recent action, however, was taken to increase the use of the eNaira.
The Director of Banking Supervision, Haruna Mustafa, stated the following regarding the subject,
“Customers should be encouraged to use alternative channels [Internet banking, mobile banking apps, USSD, cards/POS, eNaira, etc.] to conduct their banking transactions.”
According to the Central Bank of Nigeria’s notification, firms will be subject to a daily withdrawal cap. A weekly maximum withdrawal from ATMs of $225, or ₦100,000, and $45, or ₦20,000. Before the announcement, the thresholds for individuals and businesses were $338 (₦150,000) and 1,128 (₦500,000), respectively.
In Nigerian banks, there is also a similar withdrawal cap in effect. Individuals that withdraw more than $225 (₦100,000) or businesses that withdraw more than $1,125 (₦500,000) per week will be charged a 5% fee by the bank.
There is also a daily withdrawal cap of $45 or ₦20,000 for point-of-sale terminals. A 5 percent service fee will be charged to people who attempt to withdraw money from ATMs and banks on the same day.
Here’s How Nigerian CBDC Has Been Faring
Nigerians have been difficult for the Central Bank of Nigeria to persuade to use the CBDC. Since its debut in 2021, the CBDC has been utilized by a paltry 0.5 percent of the populace.
The search volume for eNaira has been virtually nonexistent, as can be seen in the chart below. The CBDC created noise when the asset was launched, but since then there hasn’t been any excitement surrounding it.
Nigeria’s experience would inspire anxiety among other governments, many of whom have yet to implement their CBDCs.