According to the official and black market naira
prices, Nigeria has one of the world’s most turbulent exchange rates. Throw in the “crypto exchange rate,” and Nigeria now has a third currency exchange competition.
According to Bloomberg, Nigerians have been accumulating crypto coins since 2020 due to a lack of trust in the country’s conventional currency, the Naira.
The Birth of a New Rate
Aminu Gwadabe, head of the Association of Bureau de Change Operators of Nigeria, spoke to Bloomberg on Nigerians’ desire for cryptocurrencies.
Most people buy crypto tokens because they have lost faith in the Nigerian naira. He also stated that Nigerians use the USD exchange rate on the bitcoin floor to evaluate the Naira’s value.
The Central Bank of Nigeria, on the other hand, has sole power over the Naira’s official rate. The illegal forex market, on the other hand, functions on the demand and supply concept. Meanwhile, the black market rate is frequently claimed as the true worth of the nation’s currency in many dealings.
Furthermore, because Nigerians use US dollars to buy digit currency, experts feel that the crypto exchange rate symbolizes the Naira’s most likely value.
The official rate of the Naira against the US dollar as of July 27 was 424.34 per dollar. The black going rate, however, is 670 per USD, which is 58% more than the official rate.
During the same time frame, payments from Nigerian wallets on Binance totaled $103,691 in 24 hours. Furthermore, figures suggest that Nigerians spent $185 million on Binance in the first quarter of this year.
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Nigerians are embracing cryptocurrency.
Nigeria leads the way in crypto uptake in Africa, with one of the highest rates in the world. Nigerians’ interest in digital assets peaked in 2020. The nation has risen to become one of the leaders, contributing to an 880% growth in crypto level of adoption in the same year.
Last year, around 24.2% of Nigerians stated that they owned at least one digital token.
Meanwhile, according to Gemini’s 2022 Global State of Crypto Report, 26% of Nigerians own at least one type of digital coin. 63% of Nigerians believe that bitcoin is the future of money. 44% of non-crypto users stated an interest in purchasing cryptocurrency.
Meanwhile, when it comes to cryptocurrency rules, it appears that the Nigerian government is either for or against authorizing the usage of virtual money.
At the height of the adoption spike, the government announced intentions to establish the e-Naira, a digital equivalent of the Naira. The new e-Naira is expected to become the country’s electronic payment token.
Following the introduction of the e-Naira, the country’s central bank forbade commercial banks from processing payments placed into cryptocurrency accounts.
Nevertheless, the e-Naira has not performed as expected by regulators because Nigerians have yet to recover from the central bank’s decision to ban crypto accounts and transactions.