With Nigeria claiming to be one of the top crypto adopters, the country has seen a huge spike in new crypto investors. The government’s decision to ban crypto in the country did not stop Nigerians from getting into the market. In fact, the crypto space in Nigeria has seen a rise in adoption and usage as blockchain adoption and implementations have risen.
Based on a survey of over 1,000 Nigerians polled, 22.77% of them have invested in cryptocurrencies with the majority of them in Bitcoin. This is very close to the government’s estimate of the number of Nigerians who own a cryptocurrency today (23%). In spite of this, the Nigerian government is clamping down on cryptocurrency activities, including shutting down exchanges and blocking access to services like MTN wallet. The only way to get around this is to use a virtual private network (VPN).
It is suspected that the “Crypto crackdown” by the Nigerian government have increased the demand for crypto adoption in the country. The new trend of crypto adoption in Nigeria, which started in 2018, was triggered by a law enforcement crackdown on cryptocurrency trading in the country. The arrest of at least six people in Nigeria has prevented crypto trading in the country, according to the news source.. Read more about latest news on cryptocurrency in nigeria and let us know what you think.
Despite the official crackdown, cryptocurrency adoption in Nigeria continues to grow, with peer-to-peer (P2P) transaction volume for Bitcoin recording its second-highest week on record last month.
Nigeria continues to rank first in terms of search interest for the keyword “Bitcoin” according to Google Trends as of this writing. According to Useful Tulips, P2P Bitcoin trading in Nigerian Naira has gradually grown in 2021, with Nigeria placing second only to the United States as the second-largest market for peer-to-peer BTC trading.
Growing Bitcoin acceptance in Nigeria has helped Sub-Saharan Africa overtake North America as the top area in terms of P2P volume, with the region recording $18.8 million in weekly volume this week, beating out North America’s $18 million.
Usefultulips.org: Weekly P2P volume by area (USD equivalent)
Local crypto acceptance has been sparked by a slew of political and economic problems, including social repression, currency restrictions, and widespread inflation.
Tensions in Nigeria have been rising since October, when the country was rocked by huge public demonstrations against police brutality and the notorious “Sars” police squad.
During the EndSars demonstrations, protesters were assaulted with tear gas and water cannons, resulting in the deaths of more than 50 people, including a dozen who were shot dead by police with live fire on October 20.
Economic repression accompanied the government response, with social groups providing food and medical assistance to protesters rapidly having their bank accounts blocked. In the midst of the violence, protesters have increasingly resorted to cryptocurrencies to keep their financial activities out of the hands of the authorities.
According to Adewunmi Emoruwa, the founder of Gatefield, a public policy group whose accounts were banned for giving funding to journalists covering the demonstrations, Nigeria’s current antagonism toward crypto assets may be traced back to the October riots.
“I believe EndSars is the driving force behind some of the government’s current actions. It instilled dread. They saw, for example, that individuals might choose to organize without using government structures and institutions.”
Despite the financial embargo, an anonymous person claiming to represent a social organization whose bank accounts were targeted during the upheaval informed the newspaper that their organization has been able to pay members’ wages using bitcoin.
“We maintain some securities in crypto – not too lot, but enough to cover us,” they said. “Thankfully, we were able to pay wages when the ban was imposed.”
In an effort to discourage the use of digital assets, the government prohibited licensed banks from handling cryptocurrency transactions in February.
Nigeria’s continuously increasing P2P Bitcoin volumes, on the other hand, indicate that the country’s burgeoning crypto user base has been mainly pushed underground in order to access crypto assets outside of the government’s scrutiny.
The prohibition has only made cryptocurrency trading tougher to oversee, according to Marius Reitz, the Africa general manager of crypto trading platform Luno, who told The Guardian:
“A lot of trading activity has been driven underground, so many Nigerians now rely on less safe, less transparent over-the-counter methods, as well as Telegram and WhatsApp groups, where individuals deal directly with one other.”
Internally, the government’s efforts to suppress crypto have been criticized, with Vice-President Yemi Osinbajo openly criticizing the ban in February.
Why is Bitcoin worth $86K in Nigeria? Here’s why the BTC premium in certain nations is so high.
Despite its opposition to decentralized crypto assets, Nigeria is investigating the creation of a central bank digital currency (CBDC).
Nigeria’s central bank said in late July that it will begin testing its CBDC on October 1 of this year.
The Nigerian government has been trying to clamp down on crypto adoption in the country, with some interesting results. In February, the regulator said it was considering shutting down bitcoin exchanges, and that it planned to shut down trading in bitcoin ATMs. What do you think of this?. Read more about nigeria cryptocurrency regulation and let us know what you think.
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