Naira now has a third “crypto exchange rate” as Nigerians rely heavily on crypto
Since Nigerians have been accumulating crypto since 2020 due to their low trust in Naira, the Nigerian exchange rate system, which is governed by official and black market rates, now has “cryptocurrency exchange rate” as a competitor. I have. Bloomberg I will report.
Nigerian President Aminu Gwadabe’s Association of Exchange Operators Bloomberg Regarding the emergence of new rates, he said:
“More and more people are buying cryptocurrencies because they are losing faith in naira. The US dollar rate on the cryptocurrency floor is used to determine the value of local currencies.”
The official Naira rate is under the control of the Central Bank of Nigeria. Black market unlicensed rates, on the other hand, varied based on supply and demand to better reflect the actual value of the Naira.
However, Nigerians buy US dollars to buy digital assets, so the new crypto exchange rate may best represent the value of the Naira. On July 27, the Naira’s official exchange rate against the US dollar fell to 424.34 per US dollar. However, the black market rate has dropped to 670 naira, which is 58% higher than the officially administered rate.
During the same period, Binance recorded transactions worth up to $103,691 within 24 hours from Nigerian wallets. In the first quarter of 2022, the Nigerian traded $185 million worth of Bitcoin on his Binance.
adoption of cryptography
Nigeria has one of the highest crypto adoption rates in the world. 2020 saw a surge in interest in cryptocurrencies among Nigerians. The surge has made Nigeria one of the countries that led an 880% increase in cryptocurrency adoption that year. In 2021, 24.2 Nigerians said they own at least one of her digital assets.
According to Gemini’s 2022 Global State of Crypto report, 26% of Nigerians hold at least one form of crypto. A majority of the population (63%) see cryptocurrencies as the future of money, and more than 44% of non-cryptocurrency owners said they would be interested in buying cryptocurrencies within the next year. .
Cryptographic regulation
The Nigerian government always seems to have a change of heart when it comes to crypto.
With adoption skyrocketing among Nigerians, the government began working on a national stablecoin, e-Naira, in September 2021. In October 2021, the government announced that his e-Naira project would be suspended indefinitely. Then two weeks later we started e-Naira.
After the launch of e-Naira, Nigerian authorities banned all financial institutions from operating cryptocurrency accounts.
