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Saturday, August 22, 2020

ADVANTAGES OF NIGERIA'S FOREIGN CURRENCY CRISIS FOR BITCOIN: TOP COUNTRIES WALLET DOWNLOADS IN FRONT OF THE US

 



   The weakening Nigerian naira currency, as well as a shortage of US dollars, are forcing businesses to turn to bitcoin as a means of payment for international transactions. Nigerian businesses need American currency to purchase new supplies, as well as order essential equipment from abroad. However, formal sources of foreign currency such as banks failed to meet this demand.


  According to reports from Nigerian publications, Businessday, even the Bureau De Change (BDCs), a popular source of alternative currency in Nigeria, cannot keep up with the high demand for the dollar.

Anonymous sources informed the publication that "recently, several BDCs have tried to take up education in bitcoin operations." Educational efforts are now bearing fruit as "many of them (business people) have come to ask us how it works, and who already knows turning to BTC for international trade."

Cryptocurrency has gained prominence in Nigeria for its use as a medium for settling cross-border payments and for remittances. The global pandemic and associated movement restrictions appear to have driven a new wave of demand for bitcoin. More and more Nigerians are exploring cryptocurrency as shown by the number of cryptocurrency wallets downloaded.

For example, data from Local.Bitcoin.com shows that Nigeria overtook the United States as the country with the most downloaded Bitcoin.com wallets in the past week.

Of the 18,613 wallets downloaded between August 16 and 10, 3,473 were from Nigeria which indicates that the country is far ahead of 2,802 than the United States. India is in third place with a total of 1,420 downloads during the same period.

Data from Usefultulips also shows that Nigeria is one of the countries with the highest volume of peer to peer bitcoin trading in the world.

The publication also highlighted a report by Blockchain.com showing the country leading the African continent in terms of peer-to-peer traded bitcoin volume. According to this report, Nigeria recorded $ 34.4 million in trade in the second quarter of 2020.


Meanwhile, the publication quoted Yele Badamosi, CEO of the Bundle as saying “there are definitely more use cases for bitcoin in Nigeria. However, Badamosi believes "most people see it as a speculative asset."

The CEO added “that (speculation) will probably be the biggest and one of the main use cases. We then have remittances and a medium of exchange between other currencies (as a use case). "The publication also said the cryptocurrency exchanges it spoke to" have seen a spike in remittances. "

The Nigerian newspaper also quoted Tomiwa Lasebikan, co-founder and head of Products at Buycoins who attributed the growth in bitcoin use "to the depreciation of the naira that has made more people willing to hold and trade bitcoin."

Rume Ophi, Partner at Vorem Nigeria is more emphatic in his opinion. He says:

They are using it to buy stuff abroad, especially the people doing business in China because it is lucrative there even though the Chinese government is clamping down on transactions using cryptocurrencies. All you need to do is have a VPN, you are on the internet, you can do your transaction. Bitcoin is not censored so it is difficult for them to control. The number of people spending bitcoin now in Nigeria is increasing like wildfire. I get all sorts of questions these days like ‘How can I start?’ ‘How can I trade?’

However, some experts say the increasing use of bitcoin also exposes old challenges such as poor education and ignorance. A report by Luno, a cryptocurrency exchange, suggests that "while more Nigerians know about cryptocurrencies, many are not well educated."

Efforts to educate Nigerians about cryptocurrency and bitcoin are ongoing and recently, a local cryptocurrency exchange used a local reality television show, Big Brother Naija to showcase bitcoin and its use cases.

Housemates on reality shows are made to participate in bitcoin quizzes. All contestants receive $ 500 in bitcoin.

  What do you think about the growing use of bitcoin in Nigeria? Share your thoughts in the comments section below.


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