Hong Kong police have issued a warning over the rise in counterfeit banknotes, with many cases linked to cryptocurrency scams. Between January and April, authorities seized 3,396 fake notes valued at HK.55 million (US6,130), a significant increase from last year’s 553 notes worth HK6,220. Three major cryptocurrency-related fraud cases led to the confiscation of 1,693 […]
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After Presidential Rebuke, Nigeria’s Central Bank Says Demonetized Naira Banknotes Still Legal Tender
The Nigerian central bank has said the recently demonetized ₦200, ₦500 and ₦1,000 banknotes will remain legal tender until Dec. 31, 2023. The central bank statement, which reaffirms a Supreme Court ruling that extended the lifespan of the demonetized naira banknotes, followed a rebuke of the CBN by the outgoing Nigerian president, Muhammadu Buhari.
Central Bank’s Silence and the Resulting Speculation
The Central Bank of Nigeria finally issued a statement on March 13 reaffirming a Supreme Court ruling which extended the lifespan of the recently demonetized naira notes. In the statement, the CBN said the ₦200, ₦500 and ₦1,000 banknotes would “remain legal tender alongside the redesigned banknotes till December 31, 2023.”
After the Nigerian Supreme Court ruled against the central bank’s decision to demonetize the old naira banknotes, the CBN initially did not issue a statement directing banks and the public to accept the old notes. CBN Governor Godwin Emefiele, as well as the outgoing Nigerian president Muhammadu Buhari’s silence reportedly led to speculation that the central bank would not abide by the court’s decision.
STATE HOUSE PRESS RELEASE
PRESIDENT BUHARI NEVER TOLD A.G. AND CBN GOV TO DEFY SUPREME COURT ORDER#Thread
— Presidency Nigeria (@NGRPresident) March 13, 2023
However, in what was described as a rare public rebuke of the CBN, the Nigerian presidency tweeted that Buhari had not instructed “the Attorney General and the CBN Governor to disobey any court orders involving the government and other parties.” It added the CBN “has no reason not to comply with court orders on the excuse of waiting for directives from the President.”
CBN’s ‘Established Tradition of Obedience to Court Orders’
Moments after Buhari’s reprimand, the CBN claimed in its own statement that it has always obeyed the decisions of the courts and that it will similarly abide by the Supreme Court’s March 3 ruling.
“In compliance with the established tradition of obedience to court orders and sustenance of the Rule of Law Principle that characterized the government of President Muhammadu Buhari, and by extension, the operations of the Central Bank of Nigeria (CBN), as a regulator, Deposit Money Banks operating in Nigeria have been directed to comply with the Supreme Court judgement of March 3, 2023,” the CBN said in a statement.
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Nigerian Banks Resume Dispensing Recently Demonetized Naira Banknotes
According to local reports, Nigerian financial institutions have begun abiding by a Supreme Court ruling that invalidated the Central Bank of Nigeria (CBN)’s demonetization of the 1,000, 500 and 100-naira banknotes. According to the court, Nigerian residents will continue to use the demonetized banknotes until the end of the year.
Court Criticizes Outgoing Nigerian President
Nigerian financial institutions have reportedly started dispensing the recently demonetized 1,000, 500 and 100-naira banknotes just days after the nation’s highest court ruled against the CBN’s so-called naira redesign policy. According to a Bloomberg report, some of the country’s leading financial institutions such as Guaranty Trust Holding Co. Plc and Sterling Bank Plc were already dispensing the old notes on March 6.
In its ruling delivered on March 3, 2023, the Nigerian Supreme Court slated the central bank’s hasty demonetization process. The court also accused the outgoing president Muhammadu Buhari of undermining the country’s democratic credentials after his government failed to abide by a provisional order that barred it from proceeding with the demonetization process.
While the CBN has not issued a formal statement following the Supreme Court’s ruling, the CEO of Sterling Bank, Abubakar Suleiman, is quoted in the Bloomberg report explaining why banks have chosen to comply with the ruling.
“The central bank is abiding by the supreme court’s ruling, as are the banks. I don’t think we need a directive to obey the court,” the executive reportedly said.
Demonetized Banknotes to Remain Legal Tender Until End of Year
By redistributing the old banknotes, Nigerian banks not only comply with the court ruling but will also placate dissatisfied bank customers that failed to withdraw cash in the days leading to the Feb. 10 demonetization deadline. As previously reported by Bitcoin.com News, the CBN’s refusal to extend the deadline, as well as banks’ inability to dispense the newly designed banknotes, helped to spark violent street protests.
Despite the pleas by members of his own political party, All Progressives Congress (APC) president Buhari insisted in a televised address that his government still supported CBN’s naira redesign policy and that the demonetization deadline would not be extended. However, in its ruling, the Nigerian supreme court declared that all the old naira banknotes would remain legal tender until the end of the year.
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Nigeria Extends Deadline for Returning Soon-to-Be Demonetized Naira Banknotes
After initially ignoring pleas to extend the period for returning old naira banknotes, the Nigerian central bank recently said it has shifted the deadline for returning old banknotes to Feb. 10. The bank’s governor, Godwin Emefiele, said some 30,000 so-called super agents have been deployed nationwide to help with the cash-swapping process.
CBN Governor Says Currency Swapping Exercise Has Been a Success
The Central Bank of Nigeria (CBN) recently said it had extended the deadline for returning the old naira banknotes by ten more days. In his Jan. 29 press statement, CBN governor Godwin Emefiele said while the exercise has been a success, shifting the deadline date from Jan. 31 to Feb. 10 helps the bank achieve success in rural communities.
The announcement follows weeks of pleas by residents who wanted to be granted more time to return the soon-to-be demonetized naira banknotes. The announcement of the extension also came just a few days after a Bitcoin.com News report suggested that some Nigerian banks were still distributing the old notes.
To ensure the CBN’s objectives are achieved before the old banknotes are removed from circulation, Emefiele said the central bank’s staff along with their counterparts from the Economic and Financial Crimes Commission (EFCC) were mobilizing and monitoring the process. In addition, the governor said some 30,000 so-called super agents had been deployed nationwide to help with the cash-swapping process in regions underserved by banks.
CBN Targets Rural Communities
Commenting on the central bank’s success so far, Emefiele said:
We are happy that so far, the exercise has achieved a success rate of over 75% of the N2.7 trillion [.86 billion] held outside the banking system.
The governor also said it aimed to give residents with genuinely earned money an opportunity to deposit their legitimately trapped monies at the CBN for exchange.
Meanwhile, in his statement, Emefiele, who has been accused of funding terrorists, insisted the central bank’s goal is not only to enhance the effectiveness of its monetary policy but to aid Nigerian security agencies in their fight against bandits and kidnappers. By demonetizing the old banknotes, the CBN will be sticking to its mandate of redesigning its currency every five to eight years, Emefiele added.
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