It’s not a secret that contactless payment methods, like cryptocurrencies, have recently gained popularity and drawn user attention in numerous industries. The pandemic has made people resort to digital payment methods more. In return, these payment methods reinforced their convenience.
While some countries have been riding the crypto bandwagon for a while already, new ones join them every day. One of those is Nigeria — a country that has become the second-largest crypto trading market in the world, just behind the US. This African country’s crypto of choice is unsurprisingly the most popular one — Bitcoin.
What’s more, this interest has not waned even after the Central Bank of Nigeria (CBN) ordered all financial institutions to stop facilitating all crypto transactions and close involved accounts.
So, this article will explore, discuss and try to explain the reasons behind this fascinating turn of events.
While Nigeria, nowadays called Africa’s Bitcoin nation, doesn’t involve itself in crypto mining, its residents still play a major role in the global trade and use of these coins. The main reason behind it seems to be the soaring naira deprecation. With the challenging economic climate everyone has been facing due to the pandemic, people are trying to save the value of their savings as much as they can.
Since naira recently lost as much as a quarter of its value in one year, no wonder alternative currencies such as Bitcoin gained such traction.
Bitcoin comes first in terms of popularity, user base, and market capitalisation compared to other cryptocurrencies. According to the statistics, it makes up around 66% of the total crypto market, and every third person in Nigeria has used it.
Due to its widespread use, plenty of industries accept it, including the gambling sector, for example. So, people can use BTC to gamble in their favourite Bitcoin casino or for a range of different purchases. Besides that, many also use it for their business or send money abroad.
Due to recessions and economic decline Nigeria has dealt with in recent years, most Nigerians have lost trust in the government and its policies. The current inflation and increased living costs made the country’s centralised financial system the focal point of the problem, bringing residents’ mistrust to another level.
Since Bitcoin is decentralised, no entity, organisation, or group controls it or makes decisions regarding it. This gives Nigerian Bitcoin users the freedom which they otherwise would not have.
Other Bitcoin Benefits
People in Nigeria also benefit from the other features cryptos are known and praised for:
- Low cross-border transaction fees — With many laws restricting the use and exchange of foreign currencies, cryptos emerged as a solution. Many people use Bitcoin to send money to family or friends abroad.
- Fast transfers — While they might not be instantaneous, Bitcoin transfers are incredibly fast. Transactions can clear in just a couple of minutes, which is much quicker than traditional methods like credit/debit card or bank wire.
- Mobile use — You can buy, sell, or trade cryptos directly from your phone. People without access to banks can still access and manage their finances wherever they are, any time they like.
- Privacy — Unlike other payment methods, Bitcoin transactions don’t require a ton of personal information. Third parties do not control the transfers, and the only way to identify a transaction is through one’s blockchain address, so Bitcoin grants people much more privacy than its fiat alternatives.
The Giant of Africa residents have resorted to Bitcoin use prompted by inflation, government policies, growing acceptance of crypto, and myriads of benefits that come with BTC use. This move has made them a part of this crypto’s network that consists of millions of other people around the world.
However, CBN has recently counteracted Bitcoin’s popularity by launching the first African digital currency e-Neira. So, we’ll have to wait and see the consequences this will have on the ever-so-popular cryptocurrency.