Bitcoin Soars In Nigeria As Government Promotes Digital Cash

Bitcoin (BTC) has seen an exponential increase in demand in Nigeria as the country’s central bank encourages the population to switch to digital cash. As a result, the price of Bitcoin has escalated tremendously above global market levels. 

The cost of one Bitcoin on Nigeria’s Crypto exchange NairaEx is currently trading at around 17.6 million Naira, Nigeria’s currency, equivalent to $38,200 U.S. dollars. This represents an increase of almost 60% compared to Bitcoin’s current price of $23,150 as of this writing. 

Nigeria Bets On Bitcoin And Digital Assets Adoption 

The Bitcoin pump in this Nigeria’s cryptocurrency exchange comes after the country’s central bank began limiting over-the-counter (OTC) cash withdrawals by individuals and corporate organizations per week. 

This withdrawal limit policy only allows Nigerians to withdraw a maximum of 20,000 Naira (NGN), worth about $43, from the country’s ATMs per day, and with a limit of 100,000 NGN, worth $217.

The letter published in December 2022, in which the Central Bank of Nigeria redesigned its policy regarding cash withdrawal limit, has resulted in a premium being added to the price of Bitcoin in the African country. 

This measure aims to allegedly eliminate money laundering and reduce inflation in the African country, which in the last report of Nigeria’s inflation rate was 21.34% in December 2022. It fell slightly from a peak of 21.47%.

The Central Bank of Nigeria also gave Nigerians until January 24 to exchange their old higher-denomination banknotes for the new currency. This measure caused unrest in the population; people reported that the deadline was too short, which led to an extension. 

Nigeria’s Long Relationship With Crypto Assets

The Central Bank of Nigeria has come a long way in embracing digital currencies. In 2021, the Central Bank issued a circular to all financial institutions to stop providing services to crypto exchanges. It also called for the closure of accounts of individuals and companies that actively use cryptocurrencies and trade in digital assets.

A few months later, Nigeria planned to pass a law recognizing Bitcoin and digital assets as capital for investment. This industry has generated a lot of interest and alternatives to diversify capital and provide solutions to economic problems in different countries.

This law was implemented after the country’s central bank failed to introduce a Central Bank Digital Currency (CBDC). This digital asset, called the e-Naira, was poorly accepted and adopted by the population last year, with an adoption rate of 0.5%.

Nigeria has also been in talks with Binance, the world’s number one crypto exchange, to develop an economic zone to support crypto and blockchain businesses in the region.

Bitcoin has begun a correction as of press time, falling 4.6% in the last 24 hours. And 0.1% down in the last seven days in the global markets. Investors expect the Federal Open Market Committee (FOMC) meeting tomorrow to have an impact in the price action.