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In 2019, the Central Bank of Nigeria (CBN) implemented its 2014 intended policy on cash-based transactions, imposing a cash handling tax on daily cash withdrawals above N500, 000 for individuals and N3, 000,000 for corporate organisations. The new bank policy on cash-based transactions (withdrawals) intends to reduce (NOT eliminate) the quantity of actual cash (coins and notes) in circulation while encouraging more electronic-based transactions (payments for goods, services, transfers, etc.)

Money serves as a unit of account, a store of value, a medium of exchange, and a means of deferred payment in economic activity. Furthermore, money has evolved over time to reduce the friction of transaction expenses associated with facilitating exchange. Indeed, the process may be traced back to the creation of the first monetary products. Conducting economic transactions in barter economies, for example, included substantial transaction costs due to the time and effort required to find a suitable partner. Following that, the demand for fungibility and divisibility became a factor in the evolution of money. As a result, the introduction of study money (notes and coins) reduced the cost of the process by allowing people to specialize in manufacturing based on their strengths and enabled monetary authorities to produce coins in handy denominations, resulting in divisibility (Baddeley, 2004). However, there has been a trend toward electronic money, which is difficult to define because it combines technological and economic aspects (Basel Committee, 1998; BIS, 1996). According to the European Central Bank (ECB), electronic money is “a prepaid bearer instrument that acts as an electronic store of monetary value on a technical device that can be widely used for making payments to undertakings other than the issuer without necessarily involving bank accounts in the transactions.” A cashless economy, in which no notes or coins are issued by central banks but by private financial firms, is analogous to this definition (Costa and De Grauwe, 2001). The Nigerian central bank implemented the new cash policy for a variety of reasons, including:

To promote the development and modernisation of our payment system in order to achieve Nigeria’s Vision 2020 goal of becoming one of the top 20 economies by 2020. Economic development is strongly connected with an efficient and contemporary payment system, which is a crucial enabler for economic success.

By providing more efficient transaction alternatives and a wider reach, we can lower the cost of banking services (including credit) and boost financial inclusion.

To make monetary policy more successful at controlling inflation and promoting economic growth.

Furthermore, the cash policy seeks to mitigate some of the negative repercussions of the widespread use of physical currency in the economy, such as:

High cost of cash: The cost of cash is high throughout the value chain, from the CBN and banks to firms and traders; everyone faces the high price of managing large amounts of cash.

Cash has a high chance of being used in robberies and other cash-related crimes. It can also result in financial loss in the event of a fire or floods.

High subsidy: According to the CBN, just 10% of daily banking transactions exceed $150k, but that 10% account for the majority of high-value transactions. This implies that the entire banking community subsidizes the costs incurred by the tiny minority 10% of the population who use a lot of cash.

Informal Economy: Because of the high use of cash, there is a lot of money outside the formal economy.


The Nigerian bankers’ bank and financial apex organization said that the cashless policy would be strictly enforced in six states: Lagos, Ogun, Kano, Abia, Anambra, and Rivers. The land of the federal capital was not left out. This policy direction was in keeping with the institution’s aim of driving the development and modernization of Nigeria’s payment system in order to achieve the country’s Vision 2020 goal of becoming one of the top 20 economies by 2020. An effective and contemporary payment system, according to the Central Bank of Nigeria, is positively connected with economic development and is a crucial facilitator for economic success. The proposed card-dominated society, which will replace currency, would also cut crime and eliminate the high costs associated with cash. Despite the brilliance of this policy and the Bankers’ Bank’s goal, the eruption from various sections of the country has been seen negatively. This is evidenced in the House of Representatives’ request to the Nigerian Central Bank to halt the cashless policy until further consultation. The policy, on the other hand, has been implemented, and some groups have viewed it as unwarranted. The researcher began this investigation with this premise in mind: to establish with facts the effects of the 2019 cashless policy on market organizations.


The study’s main goal is to look at the effects of the CBN’s 2019 cashless policy directive on market organizations. The following are the specific goals:

To see how the cashless policy has affected market transactions.


To identify the barriers to a successful cashless policy in the marketplace.


To make recommendations for how to effectively implement a cashless policy in markets.


The purpose of this research is to find answers to the following research questions.

What impact has the cashless policy had on market transactions?

What are the barriers to implementing a successful cashless policy in the marketplace?

What methods will make it easier to implement a cashless policy in markets?


This research will look at how the new cashless policy in 2019 has impacted market transactions. This information would be valuable to policymakers in developing effective implementation strategies or modifying policies to better serve the public good. In essence, this research offers a guide to appraisal.


The research focuses on the consequences of the CBN’s 2019 Cashless Policy Directive. The directive’s influence is limited to market areas, with specific attention paid to Onitsha’s biggest market in Anambra state.


A cashless transaction is one in which money is not exchanged.

A policy is a course of action or a set of principles that an organization or individual adopts or proposes.

Any structure, body, or collection of people working together to achieve the business’s common goals and objectives is referred to as an organization.

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