Nigeria is going BIG on CeFi!

The Central Bank of Nigeria is attempting to drum up the use of its central bank digital currency, or CBDC, by enforcing limits on the amount of cash citizens can withdraw from their local banks.

Nigeria’s central bank asked deposit banks and financial institutions to cap over-the-counter maximum cash withdrawals for individuals to $224 a week, in a directive issued on Tuesday. Imagine only being able to pull out $224 dollars in cash each week beginning tomorrow; in lieu of digital currency. Scary but possible, right? I’d recommend investing in a portable charger or two.

Corporate organizations’ free withdrawals will also be limited to $1,154 per week, the bank said. Withdrawals above those limits will attract processing fees of 5% and 10% respectively. Even the big fish won’t be spending fiat anymore.

“Customers should be encouraged to use alternative channels…to conduct their banking transactions,” the bank said. Those include internet banking, mobile banking apps, debit cards and the country’s CBDC, the eNaira, among other means.

Central Bank Governor Godwin Emefiele conceded in October that his institution couldn’t account for the use of 85% of Nigeria’s cash in circulation, Bloomberg reported. That, in effect, was jeopardizing monetary policy across the cash-hungry nation of Africa’s largest economy, he said at the time. So, maybe a centralized digital currency will remedy this; or is this a lie, and are they looking to hoard fiat? Who knows. Well-

The West African nation has also struggled to deal with individuals hoarding cash as it attempts to counter illegal activity, including theft and kidnappings.

Under the directive, a $44 per day limit would apply to those individuals seeking to withdraw from ATMs while over-the-counter third-party checks exceeding $112 would not be accepted.

In rare circumstances, where individuals or organizations require cash for “legitimate” purposes, a limit of $11,226 and $22,452 will apply respectively. I can only imagine what’s considered legitimate under these conditions.

Those will also be limited to one withdrawal per month and subject to rigorous identification and document requests including presenting a driver’s license and approval by the bank authorizing the withdrawal, among other things. Personally, I find this to be a bit unnerving overall, as centralized finance is a means of control, and when controlled by a governing entity we essentially enable them with an infinite money glitch allowing for a store of fiat. Tough cookie, eh?

Nigeria became the first African nation to launch a retail central bank digital currency in October 2021, with a design aimed at complementing physical cash but not replacing it entirely. Will we see Nigeria go entirely digital in the coming years?

It’s already happening.