Demonetization is the act of stripping a currency unit of its status as legal tender. It occurs whenever there is a change of national currency: The current form or forms of money is or are pulled from circulation and retired, often to be replaced with new notes or coins.

https://en.wikipedia.org/wiki/Legal_tender#Demonetization

A famous example of demonetization occurred in 2016 when India demonetized 86% of its nation's currency.

Demonetization: Meaning, Example, and How It Works https://www.investopedia.com/terms/d/demonetization.asp

Almost immediately following this announcement, the value of the naira started falling, about 3.5% within two days. People are moving their expiring bank notes into dollars. But since the foreign currency dealers (also known as bureaus de change / BDCs) are not permitted to obtain dollars or other foreign currency from the banking networks, this new demand for dollars will likely push the "parallel market" rate (the "free market" rate) even higher.

However, following the latest announcement, politicians have approached BDC operators to easily convert their soon-to-expire stockpiled naira to foreign currencies, as the apex bank gave all Nigerians six weeks to return all old naira notes to the bank’s vault.

Dollar hits N785 as politicians flood BDCs with expiring naira notes https://gazettengr.com/dollar-hits-n785-as-politicians-flood-bdcs-with-expiring-naira-notes

Some will move those funds into bitcoin, stablecoins and other cryptocurrencies as well.

Also see a related post, found here on SN, on the naira valuation drop:

The Nigerian naira plunges to a record low against the dollar #86975 https://www.bloomberg.com/news/articles/2022-10-28/naira-hits-record-low-after-central-bank-plan-to-replace-notes [Archive]

Here's another article on this development, from Bloomberg:

Flight to Dollars a Risk as Nigeria Replaces High-Value Currency https://www.bloomberg.com/news/articles/2022-10-27/flight-to-dollars-a-risk-as-nigeria-replaces-high-value-currency [Archive]

Sure wish I could edit the title of this post. Demonetize, not demonitize.

Nigeria's central bank is also making a hard court press to (eventually) become cashless:

CBN Begins Enforcement Of 100% Cashless Economy Today https://independent.ng/cbn-begins-enforcement-of-100-cashless-economy-today

This includes providing a subsidy for a specific use of the eNaira CBDC:

Shunned CBDC Looks for Street Credibility in Nigeria #85474 https://www.bloomberg.com/news/articles/2022-10-25/shunned-digital-currency-looks-for-street-credibility-in-nigeria [Archive]

Last week they (Central Bank of Nigeria, or CBN) announced a domestic card payments network:

By launching a card payment scheme, Nigeria will join the likes of India, Brazil, and Turkey, all of whom have domestic card payment schemes.

The CBN wants to create ATM cards, could compete with Mastercard, Visa, and Verve https://techpoint.africa/2022/10/26/cbn-domestic-card-scheme