Several countries around the world, including Nigeria, are increasingly using cryptocurrencies. Recent data shows that Nigeria, Africa’s largest economy, leads other African countries in the use of cryptocurrency.
Bitcoin is one of the cryptocurrencies that took-off in Nigeria when the locally infamous MMM Ponzi scheme promised 30% of investments in regular currencies and Bitcoin. A good number of Nigerians got scammed and fell into immense debt.
However, this bitter experience did not stop the interest of Nigerians in the cryptocurrency, as Binance Research reported in 2019 that interest in Bitcoin shifted from the Western Hemisphere to the Eastern Hemisphere and unexpectedly, in this case, Africa where Nigeria has the highest ranking.
Another study published last year by Nigeria’s Chartered Bankers Institute (CIBN), also revealed that Nigeria was one of the African countries with the highest number of new Bitcoin users in 2018, despite various warnings from Nigeria’s Central Bank that Bitcoin is not a legal tender within the nation.
Besides that, data recently obtained from Coinmarketcap revealed the world’s largest users of cryptocurrency, with the use of the digital currency surging up to 46% for Nigerian youths and 211% for the nation. These trends have shown that Nigerians are highly passionate about cryptocurrencies and are one of the world’s largest users.
With these in mind, let’s take a look at the reasons for this huge adoption of cryptocurrencies in Nigeria.
1. The need to enter the global digital economy
Nigeria’s digital economy is on the rise and with a growing level of poverty, more youths are joining the global digital economy by offering digital services as freelancers.
Whilst freelancing, Nigerians face difficulty in receiving payments from their foreign clients. The very popular American-based Paypal does not allow Nigerians to receive payments, and other alternatives such as Money Gram and TransferWise are not only costly and slow but also have rigid verification methods.
Bitcoin, on the other hand, provides Nigerians with a flexible, almost seamless and cheaper way to obtain cross-border payments after providing their services to clients and businesses.
2. Stable value for money
Nigeria is riddled with many economic problems such as inflation and the devaluation of its national currency, the naira. This has made the official currency of the nation a weak store of value, forcing some Nigerians to store their value in a currency like Bitcoin which is immune to inflation and can shield its owners from excess money printing by central authorities, as well as other uncertainties.
3. Easy way to Grow money
A lot of Nigerians use cryptocurrency wallets such as Luno and Quidax to buy and store their digital currency. As we have seen with bitcoin (0.001 Bitcoin equals 4,415.35 Nigerian Naira), cryptocurrency rises in value over time. Nigerians who purchased the cryptocurrency when it was very affordable (in 2010 bitcoin was sold for $0.08 for a single coin which equals 30.32 Nigerian Naira), would have grown their investment exponentially.