A former Software Engineer at Microsoft Tomiwa Lasebikan said efforts by any Nigeria’s agencies to limit the use of bitcoin will not work, saying officials might want to take action to slow down the adoption of digital currencies by Nigerians, but “CBN cannot kill bitcoin” he says.
Some of the measures the co-founder of Buycoins Africa foresees the CBN might want to take include 1) enforcing more rigorous KYCs, 2) driving crypto companies out of the traditional banking infrastructure, this “will not kill bitcoin or the value of bitcoin” he said.
He said the majority of crypto activities happen in informal channels like Whatsapp or Telegram social media chat groups where peer to peer trading are initiated.
At the time of this report, 1 Bitcoin is N8,565,671 in Nigeria.
Nigerian Expatriates Now Use Bitcoin To Preserve Their Money Against Overvalued Naira
According to the co-founder of Buycoins Africa, Nigerian expatriates use cryptocurrency to evade CBN’s overvalued exchange rate when sending remittances.
The former Microsoft software engineer said the fixed exchange rate make recipients here in Nigeria lose between 20-30% of their remittance when they retrieve fund.
At the time of this report, CBN’s exchange rate is fixed at N380 while NGR against USD goes for as high as N495 at the parallel market, the most accessible market for Nigerians who want to carry out foreign transactions.
Nigerian Importers Make Payment In Bitcoin
The CBN’s draconian monetary policies aren’t helpful at the exchange market either, forcing foreign e-commerce buyers and sellers to resort to black market rate.
For instance, commercial banks set Debit Card purchases in the US dollar at $100, limiting e-commerce traders who buy goods on aliexpress, amazon and so on.
Also, research has shown that some importers, who are limited by the CBN’s forex policy now use bitcoin when making payments across borders.
Lasebikan described the use of bitcoin by Nigerians as a new dawn for cross-border payment
According to him, government’s aggressive effort to limit Nigerians to foreign services and products such as making payment for Nexflix and Apple Music would not work, but would force user to use bitcoin which is their best alternative.
The software engineer explained in an interview that the Federal Government knows the potential of bitcoin.
He alluded to the fact that organisers of #EndSARS protest in October 2020 used bitcoin and ethereum to receive donations when the CBN were monitoring the inflow of donations to their naira account.
The development has given bitcoin an edge over the naira, making Nigeria to rank as one of the top cryptocurrency markets.
Some years back, Nigeria’s Security Exchange Commission (SEC) warned crypto buyers and sellers in Nigeria to steer clear of crypto trading, the government was losing money in registration fees and taxes.
In 2017, the CBN warned financial institutions in the country against doing business in cryptocurrencies, saying virtual currencies “are not legal tender”.
In the circular, the apex specifically listed bitcoin, Ripples, Monero, Litecoin, Dogecoin and Onecoin as some of the virtual currencies they must avoid trading in like a plague, saying any bank that does crypto transactions does so at their own risk, but that has changed.
Recently, SEC made an amendment to the law banning digital asset, announcing that it would now register crypto firms that want to operate in Nigeria.