The war on cash is happening everywhere, from advanced economies to developing markets. The official line is that central banks and governments want to clamp down on tax evasion, improve access to banking, keep up with financial innovation, and curb illicit activities. The more realistic motivation, however, is to control the population, comparable to what China has accomplished with its social credit score and e-yuan. But while much of the discussion surrounds Beijing, Sweden, and now the United States, A new nation has fired an opening salvo against cash: Nigeria.
Nigeria’s War on Cash
The Central Bank of Nigeria (CBN) announced in a Dec. 6 letter to financial institutions that it would be capping ATM cash withdrawals to 20,000 naira ($45) per day. Weekly cash withdrawals would also be limited to 100,000 naira ($225) for individuals and 500,000 naira ($1,120) for corporations. Anyone withdrawing beyond these maximum amounts would be slapped with fees of up to 10% and face “enhanced due diligence and further information requirements” from banks. The letter added that only denominations of 200 naira and less would be loaded into ATMs.
Overall, according to the CBN, there would be significant penalties and sanctions for individuals caught “aiding and abetting the circumvention of this policy.” The new edict will go into effect on Jan. 9, 2023.
The move is not surprising since the CBN has been essentially overhauling the financial system. Last month, officials confirmed that it would issue re-designed high-value banknotes to remove excess cash from the system, giving citizens until the end of January to submit their old notes. In addition, the CBN plans to mint more of its digital currency – the eNaira – which was launched last year without much fanfare. The central bank has noted that customers should try using various alternatives, such as online banking, mobile banking applications, cards, the eNaira, and other forms of non-cash payment options.
CBDCs Coming to a Nation Near You
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With China ostensibly leading the global economy in the creation, adoption, and transition to digital money, other countries, including the United States, are hopping on the Central Bank Digital Currency, or CBDC, bandwagon. Despite flip-flopping on the subject for the last couple of years, the Federal Reserve finally jumped headfirst into digitizing the greenback. This past summer, Fed Vice-Chair Lael Brainard was all in on establishing a CBDC, telling Aspen Institute Economic Strategy Group that avoiding its adoption “doesn’t sound like a sustainable future to me.” The Eccles Building would publish several white papers that mainly championed the benefits of a digital dollar. The Fed then initiated a pilot project.
In November, the Fed Bank of New York launched a 12-week trial with several major financial institutions, including Citigroup, HSBC, Mastercard, and Wells Fargo. The regional central bank noted that the program – named the regulated liability network – will be conducted in a test environment and rely on simulated data. Put simply, it will monitor how banks utilize digital tokens in a database and if such a system speeds up payments.
Indeed, the Fed is feeling the pressure to institute a digital currency. The Treasury Department gave its seal of approval, while the White House published a crypto regulator framework that would encourage the Fed to research and manufacture a CBDC. Officials say this is a critical step forward because it will support national security, advance economic growth, protect consumers, promote communication with other platforms, and respect human rights (ha!). So, before the American people realize it, a digital buck will be as standard as President Joe Biden forgetting where he is going. This dramatic shift will have a broad array of consequences for liberty and privacy.
Why a CBDC Is Frightening
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As Liberty Nation has regularly reported over the years, two major financial trends are unfolding worldwide: the war on cash and the de-dollarization crusade. The latter is not a conspiracy theory confined to the pages of Infowars; It has been widely promoted for years. For example, the International Monetary Fund (IMF) published a working paper titled “The Macroeconomics of De-Cashing,” which essentially offered a framework for how governments can advance the campaign to become a cashless world. The evisceration of physical money has occurred in incremental steps, from the European Central Bank (ECB) no longer issuing the 500-euro note to the Indian government abolishing 500- and 1,000-rupee notes in four hours.
But if most consumers voluntarily depend on pieces of plastic and electronic devices to pay for goods and services, why should this matter? The Fed Bank of San Francisco discovered in a May study that only 40% of small-value payments involved cash in 2021, while the Pew Research Center confirmed in October that 41% of consumers revealed that none of their items are paid for in cash in a typical week. The problem is the track record of the Leviathan, known for extending its tentacles to every crevice of the public’s private affairs, be it the bedroom or the bank account. Whether it is forcing citizens to adhere to public health measures (vaccinations and lockdowns) or possessing political opinions that contradict the ruling party, going digital without any alternative signals a major move toward a future with little personal freedom.
