Bitcoin For The People: Nigeria Caps ATM Cash Out at $45

• Nigeria’s central bank has put a cap on daily withdrawals for both individuals and businesses to boost online transactions.
• Bitcoin adoption is likely to increase as the nation moves cashless.

The Central Bank of Nigeria (CBN) has capped the country’s daily and weekly cash withdrawal limits to turn Africa’s most populous nation into a cashless society. The apex bank wants Nigerians to rely on digital options for most transactions.

On Tuesday, CBN published a official note revise cash limits for individuals and corporate organisations. According to the memo, Nigerians can withdraw a maximum of ₦20,000 ($45) daily, to a maximum of ₦100,000 ($224) for individual accounts and ₦500,000 ($1,122) for corporate accounts.

Automated teller machines (ATMs) across the country will be set to comply with the new directive and will also not dispense naira denominations higher than ₦200. All cash withdrawals above the set limit will incur fees of 5 per cent and 10 per cent respectively.

The new rules are part of a wider government effort to limit cash transactions and reduce the amount of cash in the open market. Last month, the CBN announced plans to redesign high value naira notes and specified a January 31 deadline for the public to deposit old notes in banks. At the time, CBN Governor Godwin Emefiele said 85 percent of all cash in the country was outside commercial banks and blamed this for the country’s rising inflation. He also specified that from 2015 to September 2022, cash in circulation doubled to 3.23 trillion naira ($7.3 billion). According to him:

That is unacceptable, and it actually takes control of the money supply out of the hands of the central bank. No doubt we believe [this directive will]have a positive effect on inflation.

Nigeria’s new withdrawal limit will kick in on January 9 and also prevents individuals from cashing checks above ₦50,000. However, the bank will allow a maximum cash withdrawal of ₦5 million and ₦10 million for individuals and businesses respectively under “compelling circumstances not exceeding a once a month.”

Implication of New Naira Withdrawal Limits

The Nigerian Senate, business experts and financial stakeholders have blamed the CBN for its new directive. These parties are concerned that enforcement of these rules could make the economic environment more uncomfortable. During a Wednesday plenary, Senate Minority Leader Phillip Aduda warned that the policy would affect small business owners and has asked the Senate to engage the CBN. Consequently, the Senate has invited two CBN deputy chairmen to defend the policy.

However, crypto use and adoption may see a silver lining. Nigeria has one of the highest rates of crypto adoption worldwide and is home to more than a third of all crypto holders in Africa. According to a 2021 Triple A Crypto Ownership Ranking, Nigeria’s Bitcoin ownership rating is the fourth largest in the world at 22 million. The USA is number 1 with 46 million, followed by India and Pakistan with 27 million and 26 million respectively.

Probably any attempt to stifle the Nigerian market will only push people towards Bitcoin. Last year, CBN ordered financial institutions to close crypto operative accounts. Instead, the country’s Bitcoin usage increased as people moved to peer-to-peer trading on exchanges like Paxful. In fact, they have held conferences in the country during the year.

We have been on the ground in Nigeria and spread out #Bitcoin education far and wide 🇳🇬 pic.twitter.com/NSCw6fF9jl

— Paxful (@paxful) 29 January 2022