Bitcoin adoption in Nigeria is increasing as the central bank blocks transfers in naira

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Peer-to-peer Bitcoin (BTC) volume in Nigeria continues to rise as Africa’s largest economy remains a bastion for adopting crypto. According to Quartz Africa, data from Bitcoin P2P marketplace Paxful shows the country ranks second after the US in terms of trading volume.

Since 2015, Nigerians have traded over 60,200 BTC on the Paxful platform, which equates to a volume of around $ 566 million. Coin Dance data shows trading activity for the week ended December 12 at 886.3 million naira (approximately $ 2.3 million).

Bitcoin’s growing appeal among Nigerians is likely due to a confluence of factors, most notably the strict foreign exchange policy of the Central Bank of Nigeria (CBN) and the rapid decline in the country’s fiat currency – the naira. In a communique issued on December 16, the CBN ordered international money transfer companies (IMTOs) to stop processing diaspora remittance payments in naira.

According to the central bank, the move is in line with the new policy of allowing Nigerians to receive international payments in their domicile accounts. The central bank also issued a notice stating that two IMTOs – TransferWise and Azimo – were not allowed to operate in the country.

While the CBN may reverse some of its stricter policies on forex micromanagement, the scarcity caused by these earlier banking laws appears to have pushed more Nigerians into alternative currencies. Indeed, the acceptance of Bitcoin tends to rise sharply in countries with rising inflation and falling confidence in the national fiat currency.

With an average age of 18, Bitcoin likely offers an alternative for the tech-savvy young population to the mainstream banking and financial architecture under government control. During protests against police brutality in October when the government ordered banks to freeze the accounts of supporters of the movement, protesters seamlessly switched to BTC and crypto donations.

According to data from Google Trends, Nigeria remains number one in terms of global search interest for Bitcoin. However, regulatory clarity for the crypto and blockchain area has not yet occurred in the country.

In September, the Nigerian Securities and Exchange Commission announced plans to create a regulatory framework for cryptocurrencies in the country. At that point, the commission stated that it would regulate crypto assets as securities unless otherwise demonstrated.