This is an opinion editorial by Ray Youssef, a founder and CEO of Paxful and a founder of the Built With Bitcoin Foundation.
Imagine standing in endless lines, fighting to get ahold of your own money. Read that again and try to make sense of it. This is life for millions of Nigerians right now, who face a redesign of their banknotes, the naira, which means old naira bank notes will be useless after February 10. This is a problem because while Nigeria hopes to move closer to a digital-cash economy, the country is still heavily cash dependent. The policy is causing a flood of people at bank offices and ATMs, desperate to swap their old bank notes for the new redesign.
Adding fuel to the fire, the Central Bank of Nigeria (CBN) has imposed a weekly cash withdrawal limit which, as of January 9, was 500,000 naira for individuals (around $1,087) and 5,000,000 naira (around $10,087) for organizations. While these weekly limits already seem insane, the actual amount Nigerians can pull out depends on what’s available at each location.
What’s Unfolding On The Ground In Nigeria
My team in Nigeria is witnessing all-day queues — with many people walking away empty handed. Some bank offices and ATMs do not even have cash to dispense. Nigerians are bringing mattresses to ATMs and others are arriving at ATMs at 4:00 a.m. to be 115th in line for when they open at 8:00 a.m. Scarcity is an even bigger issue in some rural areas and individuals have not been able to access any new notes. I’m hearing that, after returning the old notes to the banks through their kids or agents because most are unbanked, they are unable to get new notes. This puts a halt to their day-to-day transactions and livelihoods. And for the individuals who are able to get naira, point-of-sale (PoS) transaction charges skyrocketed by 400% in most cities across the country. This is causing a lot of fear as inflation is already over 20% and Nigerians are struggling to keep up with the cost of living.
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