Home 2023 Bitcoin Uprises in Nigeria as The Government promotes Digital Currency

Bitcoin Uprises in Nigeria as The Government promotes Digital Currency

by John Heffernan

Bitcoin (BTC) has witnessed rapid growth in demand in Nigeria as the country’s central bank pushes citizens to use digital currency. As a result, the price of Bitcoin has skyrocketed well above global market norms.

The price of one Bitcoin on Nigeria’s Crypto exchange NairaEx is now about 17.6 million Naira. In Nigeria’s currency, it is comparable to $38,200 USD. This implies a nearly 60% gain over Bitcoin’s current price of $23,150 as of this writing.

Nigeria bets on the adoption of Bitcoin and other digital assets.

The Bitcoin surge in Nigeria’s cryptocurrency exchange follows the country’s central bank’s decision. To limit over-the-counter (OTC) cash withdrawals by individuals and business entities each week.

This withdrawal limit policy permits Nigerians to take a maximum of 20,000 Naira (NGN), or about $43, from the country’s ATMs every day, with a daily ceiling of 100,000 NGN, or approximately $217.

In December 2022, the Central Bank of Nigeria released the letter regarding changing its policy on cash withdrawal limits, resulting in the addition of a premium to the price of Bitcoin in the African country.

To minimize money laundering and reduce inflation, the African country aims to take this action. According to the latest data, its inflation rate was 21.34% in December 2022. It dropped marginally from a high of 21.47%.

The Central Bank of Nigeria also gave Nigerians until January 24 to exchange their old higher-denomination banknotes for the new currency. This measure caused unrest in the population; people reported that the deadline was too short, which led to an extension. 

Crypto Assets’ Long Relationship with Nigeria

In terms of accepting digital currencies, the Central Bank of Nigeria has gone a long way. The Central Bank issued a directive to all financial institutions in 2021 instructing them to cease providing services to cryptocurrency exchanges. It also asked for the cancellation of accounts belonging to people and businesses who actively utilize cryptocurrencies and deal in digital assets.

Few months later, Nigeria intended to introduce legislation recognizing Bitcoin and digital assets as investment money. This business has produced a lot of interest and possibilities for diversifying money and providing answers to diverse countries’ economic difficulties.

The central bank failed to develop a Central Bank Digital Currency (CBDC), so the government enacted a law. Despite a lack of success with the e-Naira digital asset, which only had a 0.5% acceptance rate among the public, the law remains in effect.

Nigeria has also been in engagements with Binance, the world’s largest crypto exchange, to establish an economic zone to encourage crypto and blockchain enterprises in the region.

As of publication time, Bitcoin has began a correction, losing 4.6% in the previous 24 hours. Global markets are down 0.1% in the previous seven days. The Federal Open Market Committee (FOMC) meeting tomorrow is expected to have an influence on price activity, according to investors.

To speak to a professional on Cryptocurrency, contact KXCO.IO.

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