Blockchain, Cryptocurrency

Nigerian Ex-pats use Bitcoins to bypass inflated exchange rate

A former Microsoft software engineer and co-founder of Buycoins Africa, Tomiwa Lasebikan, says some Nigerian ex-pats are now using bitcoin to bypass the country’s overrated exchange rate sending remittances.

As cited by Lasebikan, the Central Bank of Nigeria (CBN) ‘s fixed exchange rate of $1:380 is robbing recipients 20-30% of their remittance value each time they reclaim funds. At the time of this writing, the parallel exchange price of one dollar to the Naira is 1:480, according to Abokifx.

Furthermore, merchants weakened by the country’s firm foreign exchange regulations are now resorting to bitcoin when doing their online transactions or across borders. In an interview, Lasebikan says bitcoin has also provided Nigerian residents to pay for services or utilities that the CBN deems typically irrelevant. 

He says:

Another thing would be for people who want to have access to online sources abroad…You want to pay for Netflix, Apple Music, or whatnot. All of the things the government is aggressively clamping down on.

Before this year’s events like Endsars demonstrations, “been oblivious to the immense potential of bitcoin.” 

During the lockdown time, cryptocurrency acceptance in Nigeria grew, and the country is now regarded as one of the top cryptocurrency markets. In the past twelve months, developments in the crypto world may have helped change the Nigerian government’s judgment of cryptocurrencies.

As Lasebikan recognizes, authorities might now want to take a step to slow down Nigerian’s digital currencies adoption. 

As claimed by Lasebikan, straightforward way authorities can achieve this is by clamping down on centralized crypto exchanges, enforcing more rigorous KYCs, or driving crypto companies out of the traditional banking infrastructure.

As Lasebikan explains,

“This will not kill bitcoin or the value of bitcoin” because the “majority of crypto activities happen in informal channels.”

He says any clampdown will not result in the dropping of peer to peer trading, which is initiated via Whatsapp or Telegram social media chat groups.

Bitcoin trading is censorship-resistant, and there is no way for Nigerian authorities to stop or invalidate transactions. Realizing this and other attributes about bitcoin means the CBN and others will not work to control the digital currency. For crypto users, knowing this is reassuring, and it helps to maintain or accelerate the adoption momentum.

Do you agree with Lasebikan about the immense power of bitcoin in Nigeria? Share your thoughts in the comments section below.

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