• Nigeria has introduced a central bank digital currency (CBDC), the eNaira, with restrictions on cash withdrawal.
• The government’s goal is to encourage people to use alternative options such as the CBDC instead of cash.
• Nigerian citizens are aware that these regulations are about financial control and pushing a cashless policy in which the government has complete control over all citizens who use it.
Introduction
Heritage Falodun, a Bitcoin consultant and computer scientist based in Nigeria, discusses how Nigeria’s introduction of a central bank digital currency (CBDC), the eNaira, into its financial system is leading to different sets of financial policies, regulations, and restrictions from the country’s central bank.
Cash Withdrawal Restrictions
In an attempt to drive consumers toward alternative options like its CBDC, the Nigerian government has now put restrictions on the amount of cash that can be withdrawn. It has limited cash withdrawal from banks to about $225 per week or around 100,000 naira with a daily limit of $45. Despite this being part of Godwin Emefiele’s plan for more Nigerians to be financially included through evolving money from commodity to metallic paper plastic and now digital forms, it has led to an unintended consequence where banking is becoming un-banked due to rigid access to foreign exchange and epileptic cross-border payment channels among other factors.
Citizens Understanding
The well informed Nigerian youth (70% of population) understand that these regulations are mostly about financial control and pushing a cashless policy in which the government has complete control over all citizens who use it as evidenced by Oluwasegun Kosemani’s tweet about spending 1000 Naira from his Naira @Mastercard by @gtbank on 10,000 Naira in cash via @palmpay_ng POS two days after Central Bank’s deadline for returning old naira denominations.
Conclusion
The Nigerian government introducing their new CBDC system was intended for more Nigerians to be financially included yet it seems to have had some unforeseen effects such as banking becoming un-banked due to rigid access and epileptic cross-border payments channels among other factors as well as complete governmental control over those who use it. It remains unclear what will happen next but one thing is certain; Nigerians are aware of their situation and they are not going down without a fight.
Takeaway
The introduction of eNaria in Nigeria may have been meant for good intentions however certain restrictions have led it down an unintended path where banking is becoming un-banked due to rigid access and epileptic cross-border payment channels among other things while giving complete governmental control over those using it. Despite this awareness amongst Nigerians they remain determined not go down without a fight against this situation they find themselves in.
