Cryptocurrency Trading Booms in Nigeria Despite Warnings From Lawmakers and Regulators.
Nigerians trade bitcoins worth up to $ 4 million a week on 13 local exchanges, though the authorities have issued stern warnings about investing in cryptocurrency. Regulators and lawmakers in Nigeria have a strict position on cryptocurrencies.
However, these warnings have not changed the stance of the citizens as the latest stock market data shows. The value of Bitcoin has fallen since last year, but interest in the most popular cryptocurrency has not yet declined in Nigeria. The Nigerians continued to invest, making a weekly exchange of N1.389 billion worth of Bitcoin (> 3.8 million dollars) in February, after having registered an average of 1.299 billion naira (<$ 3.6 million) at the end of December.
That may be due to the fact that cryptocurrencies provide a medium for which Nigerians and other African countries can make payments online and abroad when the local banks wouldn’t or would incur exorbitant charges and tiresome processes for such transfer.
There are currently up to 13 crypto currency exchanges in Nigeria. Trading on local platforms posted a weekly record of nearly N1.95 million worth of bitcoin in mid-December, which is about $5.4 million at current exchange rates.
Nigeria’s central bank governor Godwin Emefiele warned recently that “cryptocurrency or bitcoin is like a gamble”, though the Senate has launched an investigation into “the viability of bitcoin as a form of investment” according to a report.
Experts have called for the government to reconsider its position and adopt smart rules to “drive innovation”. Regulators need to understand how this works before they enforce prohibitions, analysts say.
According to Owenizi Odia, Nigeria’s spokesman for Luno, an exchange market operating in the country, stern warnings haven’t affected trade.
The virtual currency has become attractive for most Nigerians because of the ease it presents for online money transfer to other African countries and abroad.
“I think there’s an acknowledgement that this technology is the future, going beyond bricks and mortar to improve cost efficiency,” stated Muyiwa Oni, an analyst at Stanbic IBTC Holdings in Lagos.
Emeka Okoye, a software developer and chief architect at Cymantiks Nigeria has urged government institutions to rethink their approach to regulation. The expert said criticism would only fuel further speculation and encourage the use of cryptos by criminals. Okoye advised Nigerian regulators to adopt “smart regulation”, rather than outright ban:
“It is an attitude of allowing innovation to move forward and let regulation follow. It is about the consumers and not about the players”.
Whether or not the authorities are calling it gambling or ponzi scheme, Nigerians are just looking for any opportunity to get ahead of the curve, it’s part of the hustle.
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