Central banks are natural adversaries to the development of cryptocurrencies and their adoption. This reality which led to the creation of the CBDCs in the major world economic powers is also experienced in African countries. Presented as a pioneer in opening up the continent to cryptocurrencies, Nigeria has seen its P2P Bitcoin (BTC) trading volume increase to second behind the United States according to Quartz Africa. Achieving such a feat, however, is tied to the rigid economic policies practiced by the country’s central bank. More details below.
Bitcoin to counter the cessation of diaspora remittances in Naira
According to data published by the platform Paxful, Those are over 60,000 BTC that have been transferred by Nigerians since 2015. More than the benefits to be derived from using Bitcoin, Nigerians’ growing interest in cryptocurrency is notably influenced by national economic realities. With inflation, the latter lost confidence in the local currency, the Naira, especially since the arrangements made by the Central Bank of Nigeria (CBN). This has in fact ordered international money transfer operators (IMTO) of end diaspora transfers in naira.
If the measurement is in accordance with the new law in force in the country regarding incoming international payment transfers, it pushed more Nigerians to adopt Bitcoin. Just for the second week of December, Coin Dance data shows 886.3 million naira (approx. $ 2.3 million) trading activity involving Bitcoin. Nigeria is not an isolated case, since the asset has also shown the same utility in other countries affected by rising inflation and a decline in confidence in the local currency.
A credible alternative for local youth
More aware of technological innovations, Nigerian youth are undoubtedly the layer through which the Bitcoin revolution shines the most in the country. At the forefront of recent protests against police violence, she had already successfully tested the use of cryptocurrency. In particular, this enabled them to bypass the freezing of the accounts of the instigators of the movement to finance the demonstrations.
Moreover, interest in Bitcoin has never been as strong as it is now in the country as evidenced by data from Google Trends. The country is thus classified world leader in terms of research on the main cryptocurrency. A situation which has led regulators to think about creating a regulatory framework to control the multitude of emerging activities in the sector.
With such realities, it is clear that the adoption of Bitcoin has a bright future ahead of it in Nigeria, and by extension in Africa. Indeed, the involvement of the continent’s leading economic power in the cryptocurrency market and the benefits for its population should resonate with other countries.