Former Microsoft Engineer Says Nigerian Expats Are Using Bitcoin To Bypass The Country’s Overvalued Exchange Rate
A former Microsoft software engineer and Buycoins Africa co-founder Tomiwa Lasebikan says that some Nigerian expats are now using bitcoin to circumvent the country’s overvalued exchange rate by sending remittances.
According to Lasebikan, the Central Bank of Nigeria (CBN) fixed exchange rate of $ 1: 380 is robbing recipients of 20 to 30% of the value of their remittances every time they recover funds sent from abroad. At the time of writing, the parallel exchange rate of a dollar to the Naira is 1: 480, according to Abokifx.
Likewise, importers who are crippled by the country’s rigid foreign exchange regulations are now turning to bitcoin when making payments online or cross-border. Speaking in an interview, Lasebikan says that bitcoin has also given Nigerian residents the opportunity to pay for services or utilities that the CBN generally deems unnecessary. He says the following:
“Another thing would be or problematic for people who want to have access to resources outside the country. You want to pay for Nexflix, Apple Music. For all these things the government is taking drastic measures ”.
The software engineer explains that the Nigerian authorities, prior to this year’s events, such as the Endsars protests, “had ignored the immense potential of bitcoin.” During the lockdown period, the use of cryptocurrencies in Nigeria grew and the country is now ranked as one of the top cryptocurrency markets. It is the events in the world of cryptocurrencies in the last twelve months that may have helped change the Nigerian government’s perception of cryptocurrencies.
Consequently, as Lasebikan acknowledges, officials may now want to take action to curb the adoption of digital currencies by Nigerians. According to Lasebikan, a simple way that authorities can achieve this is by cracking down on centralized crypto exchanges, enforcing more rigorous KYC, or expelling crypto companies from traditional banking infrastructure.
Still, as Lasebikan explains, this “will not kill bitcoin or the value of bitcoin” because “most crypto activities occur in informal channels.” He says that any crackdown will not result in the drop in peer-to-peer commerce, which is initiated through the social media chat groups of Whatsapp or Telegram.
Bitcoin trading is resistant to censorship and the Nigerian authorities have no way to stop or reverse transactions. Knowledge of this and other attributes about bitcoin means that CBN and others will not be successful in any effort to control the digital currency. For crypto users, knowing this is reassuring and helps maintain or accelerate the adoption momentum.
The cryptocurrency ecosystem goes through stellar moments, many countries are under economic siege, for different reasons, which can be political or financial, the affected users always get help with bitcoin, peer-to-peer trading, it can be one of many strategies, the innovation and creativity help solve these problems. Waiting for new announcements
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