Why the Interest of Nigerians in Bitcoin is Declining

Owing to the sudden ban on cryptocurrencies by the Central Bank of Nigeria (CBN), the interest of Nigerians in Bitcoin has reduced. A recent report shows that the interest of Nigerians in bitcoin has dropped to 43% with a score of 61. Thus changing its position from first to second with El Salvador leading with a score of 100.

The Cryptocurrency ban came in the form of a circular that was first passed on February 5, 2021, which led to an increase in Peer-to-Peer (P2P) transactions. The increase was seen in the first quarter of the year 2021. According to Techpoint,  Nigeria transacted $99.1 million worth of bitcoins in the first three months of 2021 making it the first in Africa. This is followed by Kenya with $38.4 million, Ghana and South Africa with $27.4 million and $25.8 million respectively.

On November 3, 2021, the CBN issued a circular reiterating that banks in the country must desist from any form of cryptocurrency transactions. This was followed by the suspension of some accounts by commercial banks. The clampdown on cryptocurrencies led to a lack of interest of Nigerians in bitcoin. Thereby, resulting in a decrease in P2P transactions in the country.

Bitcoin as a digital currency is flexible and inflation-free hence, people prefer it to the traditional methods of payments. With the heavy restriction by CBN, Nairametrics reported that it will be hard to exchange cryptocurrency via P2P platforms. Also, some crypto specialists believe that bitcoin users on P2P platforms are being exposed to a higher level of risk.

According to reports, Senator Ihenyan, President of Stakeholders in Blockchain Association of Nigeria (SiBAN), said the association since 2017 advised CBN to regulate and not ban cryptocurrency. In the same vein,  Blockchain Nigeria User Group advised Nigerians to, “Resist every temptation to involve yourself in a huge volume of Crypto transactions that is unexplainable and questionable. If you are an OTC (over-the-counter) trader that does a large volume of transactions, be very careful and stop dragging the industry name to the mud by collaborating with bad actors to carry out clandestine Crypto transactions. “Stop helping criminal politicians and government officials in looting the treasury and hiding the money trail via Crypto”.

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