The policy of the Central Bank of Nigeria to “defend the naira” is causing more and more Nigerians to adopt Bitcoin and other crypto currencies.
The peer-to-peer volume for Bitcoin Trade (BTC) in Nigeria continues to grow, as Africa’s largest economy remains a colossus in terms of adoption of cryptomonies. According to Quartz Africa, Paxful’s data show that the country is second only to the United States in terms of trade volume.
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Since 2015, Nigerians have moved more than 60,200 BTC in Paxful, a volume of about USD 566 million during that period. Data from Coin Dance show the commercial activity for the week ending 12 December moved 886.3 million naira (approximately USD 2.3 million).
Bitcoin’s growing appeal to Nigerians is probably due to a confluence of factors, including the stringent foreign exchange policies of the Central Bank of Nigeria (CBN), as well as the rapid devaluation of the country’s fiat currency, the naira. In a statement issued on 16 December, the CBN ordered international money transfer operators (IMTOs) to stop processing diaspora remittances in naira.
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According to the central bank, the measure is in line with the new policy of allowing Nigerians to receive international payments on their home accounts. The central bank also issued a notification stating that the two IMTOs, TransferWise and Azimo, were not authorised to operate within the country.
While the CBN may be retracting some of its stricter policies on micro-currency management, the shortages caused by these earlier banking laws appear to have pushed more Nigerians to adopt alternative currencies. Indeed, adoption of Bitcoin tends to soar in countries facing rising inflation and declining confidence in the national fiat currency.
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With an average age of 18, Bitcoin probably offers an alternative for the technologically savvy young population to the banking and financial architecture under government control. During the October protests against police brutality when the government ordered the banks to freeze the accounts of supporters of the movement, the protesters readily opted for BTC and donations in crypto currency.
According to Google Trends, Nigeria remains number one in terms of interest in global searches for the word “Bitcoin”. However, regulatory clarity for crypto space has yet to materialise in the country.
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In September, the Nigerian Securities and Exchange Commission (SEC) announced plans to create a regulatory framework for crypto-currency in the country. At that time, the Commission stated that it would regulate cryptoactives as securities unless proven otherwise.