Resilient Bitcoin Interest in Nigeria Despite Govt Crackdown on Cryptocurrency Trading
Summary:
Despite President Tinubu's harsh restrictions on P2P cryptocurrency trades in Nigeria, its youth population's interest in Bitcoin remains high according to Google Trends. Areas with low bank penetration, high insecurity, and a high proportion of millennials are seen as more prone to adopt Bitcoin. Stablecoins, particularly those linked to the U.S. dollar, serve as a hedge against inflation and currency instability. Recently, the Nigerian government took measures to combat economic issues and avoid a currency crisis, including preparing new regulations banning P2P cryptocurrency exchanges. The Nigerian SEC also accused Binance of currency manipulation, leading to its ban in the country and the arrest of its executives.
In spite of a stringent prohibition on P2P cryptocurrency commerce put into effect by President Tinubu's leadership, the fervor for Bitcoin amongst youthful Nigerian citizens continues unabated. Current data from Google Trends indicates that Nigeria, which is Africa’s premier market for cryptocurrency, tops the global chart for Bitcoin (BTC) interest. This is closely followed by El Salvador. Region-wise, Delta state holds the lion's share of Bitcoin interest, succeeded by other states such as Anambra, Ekiti, Enugu, Ondo, Ebonyi, Bayelsa, Osun, Edo, and Imo. On the contrary, Lagos, the economic epicenter of Nigeria, is not within the top 15 cities in terms of Google Bitcoin searches. These data point towards the probability of regions with low banking facilities, higher insecurity, and massive millennial population leaning towards Bitcoin as a reliable source of value storage and payment solution.
Stablecoins, predominantly those linked to the U.S. dollar, have become the favored choice for Nigerians as a buffer against inflation and volatile currency rates. USDT currently dominates the stablecoin market and its utility is gradually extending to; both local businesses and individuals living abroad who are increasingly finding it practical for conducting transactions.
Citing a United Nations study, it is worth noting that Nigeria is amongst the youngest nations in the world with its population growth being one of the fastest in Africa. Almost 43% of the country's populace is under the age of 15.
The Nigerian government has been resorting to certain controversial measures in their bid to alleviate economic distress and thwart a potential currency catastrophe. As early as May 2024, preparations to enact new rules prohibiting P2P crypto trades using Nigerian naira, the national currency, was on the table. Nigeria’s Securities Exchange Commission (SEC) has directed charges of currency manipulation and speculation towards the Binance crypto exchange, asserting that this led to naira's depreciation, triggering the need for governmental interference.
Binance's alleged involvement in bribery has put Nigeria's foreign investment at risk. The regulatory body's stern position was evinced earlier in the year when Binance's operations in Nigeria were banned, followed by the detention of its senior executives, Tigran Gambaryan and Nadeem Anjarwalla, a clear sign of its commitment to enforcing regulatory norms. Gambaryan was apprehended in Abuja on charges of money laundering and tax evasion is expecting trial while Anjarwalla managed to evade arrest.
Shifting focus to January 2024, the CBN issued preliminary guidelines for banks opening cryptocurrency accounts, however, restrictions regarding trading or holding digital assets within their own portfolios continue to exist.
Published At
6/2/2024 4:01:58 PM
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