There’s still a cryptocurrency boom in Nigeria despite the banking ban.
Nigeria’s financial regulators did all their best to ban cryptocurrency but it’s clear their efforts have not yielded any meaningful results a few months after the ban. The country is a good example of how people embrace crypto to overcome the dwindling economy despite the attitude of the government towards digital currency.
In February, the Central Bank of Nigeria directed banks to identify those conducting transactions in cryptocurrency or operating cryptocurrency exchanges and close such accounts. But the ban did not stop Nigerians from carrying out financial transactions with Bitcoin. Instead, the crypto enthusiasts used peer-to-peer trades and also sent payments directly to each other.
According to Chainalysis (a blockchain research firm), the dollar volume of cryptocurrency that is received by crypto users in Nigeria has been growing in 2020 and 2021. In May, $2.4 billion worth of crypto was received in Nigeria, compared with $684 million received in December 2020.
This growth signifies that crypto is booming in Nigeria.
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A survey carried out by Statista in May revealed that 32% of respondents in Nigeria make use of crypto. A 2020 report on the adoption of crypto around the world, published by Chainalysis, also ranked Nigeria as eighth.
The interest in cryptocurrency increased last fall when Nigerians protesting against police brutality under the “EndSARS” movement used bitcoin to raise money for the protest.
The economic situation of the country also contributed to the high adoption of crypto. The recent devaluation of the Naira has pushed people to start saving in Bitcoin and Ethereum. Nigerian youths are trading these cryptos via P2P.
Some importers in Nigeria have also turned to cryptocurrency as a means of payment. Chinese merchants selling electronics and clothing in Nigeria now use crypto to make payments. This pattern is synonymous with what is happening in Eastern Europe where Chinese merchants are sending tens of millions of dollars in crypto across the border every day.
Although it is not easy to determine the amount of money that is moving from Nigeria to China through crypto, some merchants transact over $2 million to $5 million every day.
Some young Nigerians now see Bitcoin and newer cryptocurrencies as a channel to make some money since the traditional economy struggles as a result of the pandemic.
The decentralized financed industry is giving Nigerians equal financial opportunities for all (irrespective of their nationality or qualifications). Many people are also embracing different yield farming programs. Quite a number of people even got Defi loans to operate their businesses.
Ray Youssef, the CEO of Paxful (a peer-to-peer service that allows users to buy and sell Bitcoin) believes that the intense drive and business aptitude of the Nigerian youths are the biggest factors responsible for the cryptocurrency boom in Nigeria. According to him, entrepreneurship is baked into the DNA of Nigerian youths.