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The ban on the use of cryptocurrencies has had a significant impact on the cryptocurrency market in Nigeria. Nigerians have been utilizing the blockchain and bitcoin for international payments, and many earn a living through these methods. A large portion of the young population in Nigeria has embraced this form of investment. The median age is 18.1 years, and unemployment is at a staggering 27.1%, making this market a particularly attractive prospect for those looking for a way out of the job market. Furthermore, Nigerians are increasingly turning to internet technologies and cryptocurrency investment to get out of the rut they have fallen into.
Although there is no formal regulatory framework for cryptocurrencies, interest is growing among the younger generation in the continent. Nigeria is a prime example of this, with a significant interest in digital currencies among the population. This will ultimately help the Nigerian economy move forward in the coming years. If the government of Nigeria can foster this interest, this will lead to widespread adoption of cryptocurrencies in the country. But how will it be able to regulate the industry?
While the Nigerian government has attempted to limit the use of cryptocurrency in the country, it has failed. The Central Bank of Nigeria banned cryptocurrency transactions through licensed banks in February, but this ban hasn’t stopped the growth of the crypto market. Instead of closing accounts, the crypto community turned to peer-to-peer trades, which allow for direct payment. And because of these efforts, the cryptocurrency market is now worth nearly $1 trillion.
While the Nigerian economy is the second largest in the world, the cryptocurrency market is still not regulated. While there are a number of criticisms of cryptocurrencies, the most common is their association with criminal activity. However, Nigerians have already exceeded Kenya in terms of P2P transactions in the first quarter of 2021. In fact, Nigerians have traded over $600 million in Bitcoin over the past five years.
The official ban on cryptocurrency has had some negative consequences. Although the naira has plummeted in value by 30 percent against the dollar in the past five years, its popularity grew and has been on the rise in the country. This ban has also led to increased interest in digital currencies, as many people are looking to use them to overcome the hardships of poverty. Some Nigerians are even using cryptocurrency as an insurance against currency fluctuations.
Another negative impact of the CBN cryptocurrency ban policy is the risk that it poses for keeping money in local currency. Nigeria’s hyperinflation makes it difficult for the younger generation to hold local currency, and the government is not doing much to promote the use of cryptocurrencies. The Central Bank of Nigeria has also imposed restrictions on digital currency investment and has banned commercial banks from dealing with crypto entities. These measures will only exacerbate the situation.