The economic and monetary crisis in Nigeria has now found a new scapegoat: cryptocurrency. This article explores the economic challenges Nigeria is facing, the surge of cryptocurrency in Africa, as well as the regulatory measures taken in various countries across the continent to regulate its use.
An advisor to the Nigerian President has openly accused cryptocurrency exchanges, especially Binance, of manipulating the naira-dollar exchange rate to limit speculation. He goes as far as accusing citizens using cryptocurrencies of unpatriotic behavior. Calling for intervention from the Economic and Financial Crimes Commission and the Central Bank of Nigeria, he demands a total ban on crypto to stem the monetary crisis.
Binance targeted
Binance's response was swift, asserting that its services do not serve as a price indicator for Nigeria while acknowledging difficulties in accessing its platform in the country. Despite past bans, Nigeria remains the world's largest peer-to-peer market for crypto. Even as international exchanges are hampered, Nigerians continue to exchange cryptocurrencies among themselves.
Nigerians see crypto as a solution to cope with an precarious economic situation
The devaluation of the naira, having lost 70% of its value against the dollar since last June, demonstrates the failure of measures taken by authorities to stabilize the currency. Restrictive decisions, such as banning the use of foreign currencies, have not solved the country's economic problems. Nigerians see crypto as a solution to cope with an precarious economic situation, far from any intention of destabilizing their national currency or defying their government.
The rapid deployment of cryptocurrency in Africa reflects a major transformation in the continent's financial landscape. Faced with challenges such as volatility in national currencies, high inflation rates, and limited access to traditional banking services, many people are turning to cryptocurrency as a promising alternative.
Lack of regulation leads to increased risk of scams and loss of funds
However, despite its advantages, the rapid adoption of cryptocurrency in Africa also comes with risks. Price volatility is one of the main challenges facing cryptocurrency users in Africa. Sudden and unpredictable fluctuations in the value of cryptocurrencies can lead to significant financial losses for inexperienced investors.
Moreover, the lack of adequate regulation exposes users to an increased risk of fraud and manipulation on cryptocurrency exchange platforms. Many African countries still lack clear regulatory frameworks to oversee and control the cryptocurrency market, exposing investors to an increased risk of scams and loss of funds.
