A recent survey by research firm Statista found that nearly one in three Nigerian respondents own or have used bitcoin or other cryptocurrencies. Bitcoin adoption is ahead of other countries and peer-to-peer trading platform Paxful calls the Nigerian bitcoin market the fastest growing in Africa.
According to Google Google Trends, nowhere in the world is there as much search for the search term ‘bitcoin’ as in Nigeria.
While it may seem as if bitcoin is doing well in Nigeria, the Nigerian government recently took drastic action against the coin. The Nigerian Central Bank have banned cryptocurrency trading by prohibiting banks from providing services to companies that facilitate trading in crypto currencies. Consequently, banks are now obliged to close accounts of bitcoin exchanges.
What spurred bitcoin popularity in Nigeria?
Nigeria is the largest economy in Africa with a population of over 200 million. With the economy and national currency largely being dependent on its oil export, inflation has been an ongoing concern with a struggling economy.
The young, well-educated and resourceful population and the commonplace that the internet, online mobile phone usage and payments has been for years, created the right playing field for the introduction and fastened adoption of bitcoin to benefit from.
Bitcoin provides alternative income
One of the reason of its popularity, trading in cryptocurrency provides an alternative income. Take for example 23-year-old student Samuel, who trades in order to finance his studies and support his parents. “I buy BTC for a lower price and then sell it at a higher price,” he said. “Trading Bitcoin reduces the stress on my parents because I’m able to prepare either half or the entire amount of my tuition before the payment period arrives. Through the profits I make from trading, I pay for my books, school projects and other materials I might need, house rent, food, and even subscriptions to keep me on the run.”
Bitcoin to save money
Bitcoin also manifests as a reliable way to save money considering the unreliability of the national currency and the barriers that prevent Nigerians from opening up saving accounts at National banks. All that is needed is a mobile phone and internet to start preparing for the future with the help of bitcoin.
Bitcoin for international payments
Despite its high volatility, with its cheaper and instantaneous transactions, the use of bitcoin has become increasingly popular in Nigeria to conduct international payments. 20-year-old Victor shares his experience: “I started using BTC for remittance in the early days of October 2020 when I sent Bitcoin to Madrid, Spain. Considering the stress of exchanging NGN to EUR and the time it takes to process transactions, sending money with BTC through peer-to-peer (P2P) marketplaces is the best option.”
Bitcoin provides equal opportunity
Bitcoin is decentralized, in essence making it politically neutral, uncontrollable, unbiased, open and freely accessible to everyone. It is an independent economy with a fixed monetary policy that cannot be tampered with, regardless of local conditions.
The decentralized nature can be a thorn in the side of governments. After all, controlling the financial system equals power and it offers the opportunity to steer the economy and its people. There have been cases with individual citizens losing out on monetary policy or even being repressed, usually in order to maintain the existing order.
Nigerian senators responding on the ban
The february ban by the Nigerian Central Bank ban has generated some serious response from politicians with senators expressing their concerns and calling for a deeper study of bitcoin regulation:
Senator. Biodun Olujimi of the Ekiti South Constituency was clear that his country cannot resistant crypto trading. Seeing the effect it has on the youthful population, he says:
“We didn’t create Cryptocurrency and so we cannot kill it and cannot also refuse to ensure it works for us. These children are doing great business with it and they are getting results and Nigeria cannot immune itself from this sort of business.”
He got backed by Senator Tokunbo Abiru who states that simply banning cryptocurrency would not be effective and. “It is good to ban because of the challenges that arise, but in reality a ban will not make it go away”.
Further calls for regulation were made by fellow Senator Solomon Adeola:
“All over the world, these cryptocurrencies are regulated. The operators of this so called currency are everywhere. I would indulge this Senate to allow the regulators also to be invited so that they can also tell the Committees their own position concerning the operation of cryptocurrency in Nigeria.”
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