Nigeria has experienced drastic changes since the timely adoption of cryptocurrency. There are over 5 million active crypto traders in Nigeria with predictions of the numbers doubling by the year 2040. According to the statistics, this means good news for the Nigerian economy; more BTC to Naira trades means more economic growth—at least that’s what we believe. However, recent governmental crypto regulations and clashes with foreign crypto businesses paint a contradictory picture. In this article, we delve into the rising trend of Bitcoin adoption to explore its impact and its challenges to the Nigerian financial landscape.
Bitcoin: The ‘Baba’ of Cryptocurrencies
In a country known for its entrepreneurial spirit and tech-savvy youth, Bitcoin (BTC) emerges as the ‘baba’ of cryptocurrencies. Based on a free market ideology, bitcoin was invented in 2008 by Satoshi Nakamoto, an unknown person. However, its use as a currency began in 2009, with the release of its open-source implementation. Bitcoin is currently used more as a store of value and less as a medium of exchange or unit of account.
Due to its decentralized and anti-liquidity nature, Bitcoin has become more than just a trading coin, but the hope for financial freedom and opportunities beyond traditional banking constraints.
The Need for Bitcoin Adoption
But why do we call Bitcoin the “hope of financial freedom”? Is the buzz around Nigeria’s attitude towards Bitcoin just hype?
The answer will be discussed as we take a brief trip down memory lane.
In 2007, the Central Bank of Nigeria (CBN) received the right to issue Nigeria’s legal tender which is the Naira. The act also gives the CBN the sole right to issue Naira and determine Naira’s exchange rate to other fiat currencies. At the time the laws were passed, cryptocurrencies did not exist and thus there is no legal framework addressing cryptocurrencies, nor can they be considered legal tender according to existing laws.
Meanwhile, transferring money from and to Nigeria using the traditional banking system was very expensive with multiple unaccounted fees. This became a major reason for the mass adoption of the cryptocurrency manifesto.
Another reason is the CBN’s bold move in 2021 when Nigerians reportedly had their bank accounts frozen due to interactions with cryptocurrency activities. Unfortunately, this move backfired as many Nigerians were forced to use Bitcoin to fund the Nationwide #ENDSARS campaign.
Following the freezing of bank accounts for cryptocurrency-related activities, many Nigerians promise to use Bitcoin and switch to using peer-to-peer transactions (BTC to Naira). Because, cryptocurrencies are sent from one person’s decentralized wallet to another, bypassing traditional banks entirely.
Bumps on the Journey to Bitcoin Adoption
While we praise Bitcoin for being the “Knight-in-shining-binary-codes“, it is important to note that the reluctance of the Nigerian Government to adopt cryptocurrency is not without reason.
In fact, the Nigeria Deposit Insurance Commission (NDIC) and the CBN set up a commission to look into Bitcoin after it became a relevant topic In 2016. It was later discovered that its untraceable and high-risk nature makes it a blind spot for cyber crimes and pyramid schemes. For instance, the infamous MMM had announced that it was adopting Bitcoin as a means of funding.
And that’s not all!
On 7 February 2021, the CBN cited its need to protect the public from threats by unregulated activities that are potential areas of illegal operations. These warnings by the CBN and SEC attempt to educate Nigerian citizens about cryptocurrencies and ensure they understand that the state does not guarantee cryptocurrencies, unlike the Naira.
Meaning, that before you adopt crypto, you must prepare for fluctuating regulations and inconsistent market rates. These can cause a big disruption in the smooth flow of Bitcoin adoption initiatives and investments. Thankfully, with Jackocoins, BTC to Naira transactions are seamless, making Nigerians comfortable with integrating Bitcoin into their financial portfolio.
Jackocoins—Your Crypto partner for BTC to Naira Transactions
Navigating the ups and downs of Bitcoin and crypto can be difficult especially if you’re in the baby steps phase. 7 in 10 traders quit within 6 months of trading due to fluctuating market rates, high risk, and fear of liquidity. Fortunately, Jackocoins plays a vital role in this journey, offering secure, user-friendly solutions for BTC to Naira transactions and fostering trust in the crypto ecosystem.
As more Nigerians embrace Bitcoin’s potential, the digital revolution promises boundless opportunities and economic empowerment for all.
This is so educative.
This post was really insightful, especially for someone who’s trying to start Bitcoin journey
This is insightful. Looking forward for updates on governmental crypto regulations.
I believe the FG will yield and finally accept crypto in Nigeria.