Cryptocurrency RegulationNews

Nigerians Are Using Bitcoin To Evade Overvalued Exchange Rate In The Country

In what appears to be a big win for Bitcoin and a significant loss for the Nigerian economy, a former engineer of the renowned software company Microsoft has shed light on what some expatriates are doing with Bitcoin. In his statement, the co-founder of Buycoins Africa, Tommiwa Lasebikan, noted that a handful of expatriates from Nigeria are fond of using Bitcoin to evade the inflated exchange rates in the country.

He noted that they use crypto exchanges anytime they make remittances instead of using the Central Bank of Nigeria licensed exchange outlets. According to the former Microsoft employee, the recipients are always looking for ways to evade the exchange rate that rips them off 20% to 30% of their initial value.

Nigerians are using Bitcoin to pay for services across the border

The naira to dollar parallel exchange rate, according to Abokifx, is 480:1, while the standard exchange rate of the Central Bank of Nigeria is 380:1. This now means that most of the expatriates and importers bringing goods into the country are facing a huge obstacle of getting the gains in their businesses due to the far difference in the exchange rate.

📰  Japan Reveal Plans To Launch Feasibility Study On CBCD

With this, most of them have now taken to Bitcoin as a means of payment for goods bought online or across the border. Also, Lasebikan mentioned that the average Nigerian can now use Bitcoin to pay for most products that the CBN usually sees as unnecessary.

“One thing that is worthy of mention is that people can now pay for activities outside the country using Bitcoin. People can pay for things like Netflix, Apple Music that the government is severely blocking people from accessing,” Lasebikan said.

Furthermore, Lasebikan noted that the government was not aware of Bitcoin’s potentials until it was used by people who donated towards the Endsars protest. Notably, the lockdown period endeared many Nigerians to blockchain and Bitcoin as most of them used the technology to carry out most of their transactions during the period.

Bitcoin was created to work against the traditional banking system

During the lockdown period and this present time, there is no gainsaying if a survey ranks Nigeria as one of the top countries that adopted Bitcoin during the time, according to Lasebikan. Also, events that have happened during the last few years may have helped the Nigerian government see reasons regarding digital assets’ potentials and why they need to allow people to trade them.

📰  China is Close to Launch Digital Yuan as Infrastructure Development Gets Pace

Lasebikan also notes that even though we don’t know what will develop from here, he feels that government officials might want to create a regulation that will slow down the leading crypto asset’s adoption rate. Furthermore, he notes that they might want to enforce stringent registration methods, KYCs, and moves to eliminate crypto exchanges that serve as banks for the average Nigerian. Even at that, Lasebikan says this will not have too much effect on Bitcoin’s adoption rate as most people in the country are trading the digital asset through informal channels.

He also notes that peer to peer trading that is carried out on WhatsApp and Telegram will not be affected if a clampdown should begin. Trading Bitcoin is not something that any authority can censor as all these were contained in the digital asset’s white paper. This means that even if the CBN wants to streamline the digital asset’s adoption, it will be ineffective.

📰  IOHK Launches $500k Fund For Project Catalyst

Adebayo Owotunse (Nigeria)

Adebayo Owotunse is a versatile writer who has written hundreds of crypto articles for dozens of agencies across the years. He is now also the newest addition to the Tokenhell writers team.

Leave a Reply

Your email address will not be published. Required fields are marked *

Back to top button
Close