During the October 2020 #EndSars protests in Nigeria, the Federal Government of Nigeria prevented peaceful protesters from using local payment platforms to contribute funds to promote the movement. However, bitcoin saved the day due to its freedom from government control. This opened the eyes of many young Nigerians to the advantages of bitcoin and cryptocurrency.
The young Nigerians instantly switched to cryptocurrencies as a means of raising funds. In a week, bitcoin accounted for 40% of the nearly $400,000 raised. This is one of the proofs on how young Nigerians continuously use bitcoin to navigate a non-supportive and restrictive monetary and banking system.
Since 2015, Nigerians have traded 60,215 bitcoins valued at more than $566 million, on Paxful, the leading peer to peer (P2P) bitcoin market. Real time data from Coin, from the beginning of May 2015 to the Middle of November 2020, shows that the volume of bitcoin transactions in Nigeria increased by at least 19% since 2017, and the highest transaction volume (20,504.50) was traded in 2020.
Nigeria was ranked second only to the United States in trading volume, in the Bitcoin peer to peer (P2P) marketplace of Paxful, according to Quartz Africa. Nigeria takes the lead as Africa’s largest economy, while its counterparts like Kenya and South Africa follow. This shows increased growth in the adoption of Bitcoin and other cryptocurrencies among young Nigerians.
Bitcoin trade reached 30% as the highest peak this year, during the country’s national lockdown. Paxful reported a 137% increase in the registration of new users from January to September. Paxful also stated that Nigeria has 1.3 million registered users, which makes up a quarter of their customer base.
The rapid growth of bitcoin and crypto adoption among Nigerians youths is likely due to a number of factors, chief of which are the strict exchange rate policies by the Central Bank of Nigeria (CBN) and the continuous devaluation of naira towards dollar. In an official report issued by the CBN on December 16, it directed all international money transfer operators (IMTOs) to stop processing diaspora remittance payments in naira, with immediate effect.
The Central Bank of Nigeria (CBN) said this new policy, which enables Nigerians to receive international payments in their domiciliary account, is in line with the prior official report. The CBN also issued a notice via its official Twitter account, stating that two IMTOs, Azimo and TransferWise, were not licensed to operate as IMTOs in the country. They further said that the masses should desist from patronising them.
In the last couple of years, the CBN’s “Naira Defense Policy” has worsened the standard of living of Nigerians by hardship for ordinary citizens and small scale businesses alike. However, the CBN is trying to reverse some of its strict exchange rate policies, but this has pushed many young Nigerians into bitcoin. These restrictive policies have led to the mainstream adoption of bitcoin and other cryptocurrencies across Nigeria, as bitcoin acts as a lifeline for many Nigerians as the value of the Naira continues to sink. With Bitcoin being a cryptocurrency, its value is defined by the market forces, and not by the government.
The increased awareness and availability of easy-to-use bitcoin platforms has boosted Nigeria’s Bitcoin Liquidity, thereby, putting an end to the major challenge that has hindered bitcoin adoption. Nigerians now have local and international platforms such as Roqqu, Luno and Binance to trade bitcoin and other cryptocurrencies on, but a lot of trading is still being done on informal channels via escrow services on WhatsApp and Telegram.
The data from Google Trends shows that Nigeria is at the leading position in terms of the global Google searches on Bitcoin. Due to the absence of government influence and the provision of considerable financial stability, cryptocurrencies will undoubtedly continue to garner widespread adoption across the country.