Many countries in the world are currently working on introducing their localized version of CBDC. A CBDC is a digitized version of a legal tender using blockchain technology. Nigerian Central Bank and the government are one of the first countries in the world that have introduced the digital Naira. However, the media reports indicate that there are several problems attached to this matter.
The Citizens of Nigeria have taken to the streets to protest against this sudden change in the legal tender. The citizens have started to demand access to paper money regardless of the incentives issued by the government to adopt the Digital Naira.
Citizens Reject Digital Naira on Account of Cash Restrictions
The government of Nigeria has imposed an embargo on the cash currency to promote faster adoption of the local Naira. Another concern raised by the masses is that they are concerned about their financial privacy when working with the new CBDC.
There is an increasing sentiment among business circles and the common citizens that CBDCs are not going to bring any significant benefits to the common man.
On the other hand, CBDCs have started to become more popular among the Central Bank and financial regulators around the world on account of greater control of the economic setup under their jurisdiction.
Despite adopting several tactics and introducing new incentives to encourage the adoption of new CBDC, the locals are not taking up the bait thus far.
Third-world countries are always a playground and experimentation labs for powerful nations. The craze of CBDCs among International nations is now reflected in the actions of the Central Banks policies of Nigeria. The fiduciary of Nigerian legal tender has enforced the restriction of cash withdrawals, limiting it to 100k Naira or $225 per week for every citizen.
The limit for business withdrawals was set at 500K Naira since December last year. To ensure the adoption of the new CBDC, CBN has also decided to redesign the local currency to impose people on getting it exchanged and get tired of paper currency.
On account of such policies, the locals are unable to withdraw enough cash, and at the same time, commercial banks are facing an increasingly depleting supply of cash to cater to the needs of their clients.