Why Nigeria is clamping down on Bitcoin

Aug 23

Around the world, Bitcoin has seen a meteoric rise in popularity and value. This is particularly the case when looking at the first quarter of 2021. This saw Bitcoin reach its all-time high of $58,145. Of course, some of this climb has been down to major companies investing in the currency as well as the likes of Tesla now accepting it as a form of payment for its cars. Beyond this though, everyday individuals have been taking advantage of sites such as learncrypto.com to educate themselves and to ensure that they can get in on the action too.

Nigeria is the world’s second-largest market for Bitcoin. The only country with a larger market is the USA. For Nigerians, Bitcoin has proven a safe haven for their money and investments, but recent changes and challenges mean that residents are needing to get creative!

The popularity of Bitcoin in Nigeria

The Nigerian economy may not be seen as one of the safest across the world. There is often instability and this leads to a lack of faith when it comes to investing. For Nigerians. Bitcoin was a blessing: somewhere where they could invest their funds that were unaffected by fluctuations in the world markets. It wasn’t just about security though. The use of Bitcoin has allowed Nigerians to circumnavigate another issue in the country.

In July 2020, the Central Bank of Nigeria (CBN) imposed restrictions on how much money residents could withdraw from their own accounts. This saw them being unable to spend more than $100 abroad and also limited withdrawals from local banks to $100. Bitcoin allowed Nigerians to get around this: as crypto is decentralised, the government and banks have no control over this, and so Nigerians could spend as much as they desired.

Nigerian success stories

There is a reason that Bitcoin has become so popular in Nigeria. Beyond the need for residents to find a way to spend with more freedom, there is also a generation that has become inspired by success stories. Nigeria boasts a large youthful section as part of its demographics. This younger generation has witnessed the struggles of their parents and other family members and has taken it upon themselves to ensure that they are tech-savvy and can exploit new opportunities.

Inspiration is drawn from the likes of Enogieru Osasenga who has shown just how much Bitcoin can benefit those in Nigeria. He had invested 100,000 Naira into the cryptocurrency. Only a week down the line and it had doubled in value. Of course, Osasenga is not alone in his success and many like him have paved the way for other Nigerians to follow in their footsteps.

 Why the attempt to ban Bitcoin?

The CBN has never clearly stated why it is trying to control Bitcoin or why it is trying to put an end to its use. It is not the first time that such an attempt has been made. Back in 2017, there was an attempt to outlaw all crypto across Nigeria. The result? Every year since has seen a 19% increase in the amount of Bitcoin that has been traded in Nigeria. In total, around $600 million has been traded in the country over the last 5 years.

Those in Nigeria are clear that they have no intention of abandoning Bitcoin. The currency allows them the freedom to pay for goods that they want to from abroad with no limits imposed on them by the government. After all, this is what Bitcoin was always about: a currency free from the control of banks and politicians.

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