Do cryptocurrency help Nigerian economy? Let’s look over the Nigeria ant its economy in this on going pandemic where crypto can be a good solution.
Due to the Covid-19 pandemic, Africa’s leading and the largest crude oil exporter has fallen in the outputs of goods and services. This results in a negative impact on Nigeria’s economy and causing many jobs lost. In Nigeria, more than 40% of citizens are below the poverty line. And this would be increased due to the estimation of the unemployment rate increment up to 32.5%. So, from this problem, the only cryptocurrency can save Nigeria.
To develop Nigeria’s economy, which covers the more significant portion of Africa’s economy, the stakeholders and the investors need to move into the potential intrinsic in Crypto.
Also read: COVID-19 Third Wave Impact on South Africa
Around the Ban
Nigerians who can lack bank account deals for much international trade can easily cover up their challenges with cryptocurrency.
And in Nigeria, crypto transactions are taking a noble rise.
The new young and tech-savvy population of Nigeria is very much embracing using Crypto for the first time. And this encouragement had happened when the Nigerian bank had banned Crypto for the transactions of entities in commercial banks.
According to Temitope Busari, blockchain technology makes transactions more feasible, requiring no middlemen.
Inflation might be the best reason for the present time to invest your wealth in cryptocurrencies.
And according to the managing director of Afrinvest Research, crypto assets are the fast and more straightforward options for the youths of Nigeria to invest their wealth in. However, many Crypto enthusiasts are recommending digital assets to preserve their wealth. This also secures it from the negative impact of inflation.
Nigeria’s inflation rate is 15.75% over the year, whereas Bitcoin had shown 302.8% of returns in 2020.
But the ban on cryptocurrency in Nigeria is reflecting a clear negative impact on significant numbers of Nigerians. And mainly this is the reason while most of them are moving on third parties.
Still, the trading of Crypto in Nigeria is vast enough this year. During the recent time worth $400 million, Crypto had been traded.
Crypto also smoother the economy as it has higher liquidity, so your money keeps on moving.
The expensive cross-border payments have provoked Nigerians to return back the money to home via digital assets.
During the first half of 2021, Africa’s trading volume reached $205.7 million.
According to World Bank, more than 350 million adults don’t have their bank accounts in Sub-Saharan Africa. But here, cryptocurrency trading can help to fill this gap and to continue international trade. This will better the economy and the livelihoods.
According to Keripe of Afrinvest Research, cryptocurrencies can work as an alternative source of income during such a difficult time of unemployment, inflation, and poverty. In addition, this will also protect from the downturns of the economy.
Unemployed citizens can take advantage of this using blockchain technology and cryptocurrency to generate good income.
Rules and Regulations for Cryptocurrency
There’s no objection that Crypto is beneficial in the financial streak. But it is not only the segment that can have the all-encompassing impact on the Nigerian economic challenges. And for such an area, better rules and regulations are necessary.
According to Osadiaye of FBNQuest Merchant Bank, many crimes or scams can happen with an individual cause of this. But for better transparency and crime prevention, there must be a regulatory interest.
This approach varies from country to country. But in Nigeria, it is required to create the structure for the end-to-end crypto-based transactions.
This will be easy for the crypto user and also for the foreign exchange.
However, as soon as conditions start being normal, Africa is needed to develop its blockchain industry. And this technology must meet Nigeria’s market niche.