Cryptocurrency in Nigeria: The ups and downs

Nigeria has the most number of cryptocurrency users in the world. Despite the existing ban on cryptocurrency in Nigeria, people still found a way to continue investing in the digital market. No law restricts crypto use to conduct business and guard savings. The Nigerian president suggested that the digital currency could foster double economic growth in the future and, for that reason, in Partnership with the central bank, launched the country’s digital currency known as the e-Naira. 

The Central Bank of Nigeria claimed that unregulated companies create a cryptocurrency and its continued use in Nigeria violated the existing rules of the countries, for the money is not legal. Being among the most popular cryptocurrency users, its ban on using digital currency may make other popular countries take the same step of banning the digital currency market trade from curbing any risks resulting from using digital currency. 

Many young Nigerians look forward to digital currencies in 2022 and beyond. Therefore the next conference in Nigeria themed, “Reimagining crypto as the future of finance”, brought together people to discuss the future of cryptocurrency in Nigeria. David Afolayan, one of the members, stated that conversation on the future of crypto in Nigeria is important, for it is the only new trade approach necessary for survival. 

‘”We have succeeded in this industry with zero support from the government. We can win, and we will win as long as we continue to strive,” Fejiro said during a conversation aimed at centralising cryptocurrency for Nigeria’s digital market. The questions and ideas that emerged from the conversations aimed to make cryptocurrency a better investment market. Cryptocurrency has served as one of the propelling forces in the modern payment system and has improved how people transact and make payments. Having to wait in long queues in banks has been eliminated, and the transfer fee has been made relatively cheaper with the presence of Bitcoin in Nigeria. 

Many young Nigerians look forward to digital currencies, for they are seen as tools for investment. Other young Nigerians also pass their time gambling and seeking entertainment through crypto, with success in the digital market and hype related to investing. It is, therefore, challenging to convince the young population that cryptocurrency is not the future digital market. Earlier last month, Nigeria’s central bank identified which accounts were using crypto and proceeded to cancel or freeze them. 

Many investors have seen their accounts put on hold, frozen, and seized. The only way to retrieve their money was to go directly to the bank. The reason for the ban was that cryptocurrency was not regulated. Moreover, It was discovered that there was a link between criminality and cryptocurrency. Using cryptocurrency exposes theft and cyber attacks, and the lack of self-regulation results in unethical conduct.

Confusion has emerged on how to trade digitally; however, they do not want to miss the opportunities it offers. However, banning cryptocurrency does not illegalise buying Bitcoin and other digital currencies. It still makes it very difficult for Nigerians to transact using bitcoin. Welcoming cryptocurrency helps in reaping economic benefits through jobs and taxes, so the ban on its use in Nigeria will lead to a decline in economic growth and technological efficiency. 

When the government bans crypto, investors may feel insecure since there is no compensation and no authority to report in case of theft. Therefore, this may make many withdraw from investing in the digital market for fear of loss. 

There are various outcomes that the ban on the use of cryptocurrency might trigger in Nigeria. The unemployment rate will increase by a greater percentage since cryptocurrency has created jobs for the youth. So the ban might render the traders jobless after they quit and thus increase dependency among the youth on what they rely on to lift their living standards is terminated and make them job seekers. In the same way, the economy will be affected. A few may continue transacting in the digital market, but they would not feel safe. 

Nigeria will have not only ongoing illegal activities but also income that is not reported from the legal production of goods. The economy will turn underground; hence its growth will decline. Since Bitcoin was created to reduce bottlenecks in financial transactions, its decrease in use will automatically decline economic growth. In conclusion, a ban on cryptocurrency has not made investors in digital currency lose hope nor see the collapse of digital currency in Nigeria. 

Cryptocurrency has already gained fame for being the best investment digital market, and many young investors have gained the trust to trade in the digital market to maximise the benefits of the digital market. Many investors feel it is easier to transact in the digital market than using virtual currency for transactions. 

It is, therefore, the role of the government in Nigeria to lift the ban and make sure that it intervenes in the digital currency market by taxing the funds generated either through withdrawal deposits or through profits. The government should also ensure that measures are set aside for any offenders or people who try to transact unlawfully and inform people of any risks associated with investing in the digital market and how to overcome them.

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