Nigerians in the diaspora are now using bitcoin as a new payment model to evade high exchange rate during cross-border transaction.
This assertion was made known by the cofounder of Buycoins, Tomiwa Lasebikan, a former Microsoft software engineer. According to Lasebikan, the $1:380 Central Bank of Nigeria’s fixed exchange rate is cutting deep into the pockets of the recipients, taking a chunk of almost 30% of their remittance value each time they retrieve funds.
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As published by Bitcoin News, the software engineer explains that:
Nigerian authorities had, prior to this year’s events like Endsars protests, been oblivious to the immense potential of bitcoin. During the lockdown period, cryptocurrency usage in Nigeria grew and the country is now ranked as one of the top cryptocurrency markets. It is events in the crypto world in the past twelve months that may have helped change the Nigerian government’s perception of cryptocurrencies.
The implications as Lasebikan acknowledges is that the government might consider implementing measures to curb the increase usage of digital currencies and one measure according to Ladebikan that may turn out to be an effective state weapon is by clamping down on centralized crypto exchanges, enforcing more rigorous KYCs or driving crypto companies out of the traditional banking infrastructure.
Still, as Lasebikan explains:
This will not kill bitcoin or the value of bitcoin” because the “majority of crypto activities happen in informal channels.” He says any clampdown will not result in the dropping of peer to peer trading which is initiated via Whatsapp or Telegram social media chat groups.
Bitcoin trading is censorship-resistant and there is no way for Nigerian authorities to stop or reverse transactions. Awareness of this and other attributes about bitcoin means the CBN and others will not succeed in any effort to control the digital currency. For crypto users, knowing of this is reassuring and it helps to maintain or accelerate the adoption momentum.