Through a Tuesday press release, the Central Bank of Nigeria (CBN)) announced the placement of a daily cap of 20,000 Naira ($45) on cash withdrawals through ATMs. The daily limit is a modification of an earlier cap of 150,000 Naira ($337). The move aims to promote the usage of its Central Bank Digital Currency, the eNaira.

In addition, the CBN also set a weekly withdrawal limit of 100,000 Naira for individuals and 500,000 Naira for corporations. Any amount above this limit will incur a 5% and 10% fee, respectively.

Furthermore, the CBN plans to ban the cashing of cheques above 50,000 Naira over the counter and set a 10 million Naira cap on cheques cleared through the banking system.

‘Customers should be encouraged to use alternative channels (Internet banking, mobile banking apps, USSD, cards, POS, eNaira, etc.) to conduct their banking transactions,’ the Central Bank of Nigeria recommended.

New Cash Limits to Take Effect January 9th, 2023

The new daily cash limits will take effect nationwide from January 9th, 2023.

The CBN also cautioned individuals or institutions against ‘aiding and abetting the circumvention of this policy.’ Any attempt to bypass the new regulations ‘will attract severe sanctions.’

The eNaira Has Had a Hard Time Taking Off

Nigeria launched its Central Bank Digital Currency in October 2021. However, the Central Bank’s earlier stance against cryptocurrencies and banning local banks from doing any business with crypto exchanges caused some initial confusion. Some Nigerians failed to see the difference between the eNaira and other popular digital assets such as Bitcoin, which the government was against.

In an interview with Bloomberg, Hamed Lawan, a 23-year-old driver, questioned why the Nigerian government was promoting that which it was also fighting. ‘Why is it asking us to collect eNaira? I thought the government said cryptocurrency is bad?’ he said.

Consequently, the adoption of the eNaira has been slow, and its low uptake has been compounded by Nigerians generally not warming up to the idea of a government-issued digital asset.