Nigeria had officially made it difficult for investors to buy and sell cryptocurrencies since early 2021. Banks that facilitated crypto payments, for example by offering a bank account to crypto exchanges, could expect huge fines.
Nevertheless, in April of this year you could read in the Bitcoin news that no less than 35% of Nigerians invest in cryptocurrencies such as bitcoin (BTC). Moreover, the survey at the time found that 52% of crypto investors in Nigeria allocate more than half of their assets to crypto.
In particular, the absence of traditional financial services and high unemployment and inflation are major reasons for Nigerians to invest in the new digital asset class.
BTC as a recognized investment
A report from a local Nigerian newspaper has reported that the Nigerian government will soon pass a law legalizing investing in bitcoin and other digital currencies. Should the law be signed, it would be the Nigerian version of the Securities and Exchange Commission (NSEC) to recognize BTC and other cryptocurrencies as investment capital.
Babangida Ibrahim, who was president of Nigeria between 1985 and 1993, indicated that the new law is not a 180 degree turn for the African country:
“It is not about lifting the ban, we are looking at legality: what is legal and what falls within the framework of our activities within Nigeria. When crypto was initially banned in Nigeria, the central bank found that most of these investors don’t even use local accounts. They therefore do not fall under the jurisdiction of the central bank.
CBDC failed
In October, the country launched its own central bank digital currency (CBDC), called the eNaira. In October 2022, twelve months after its launch, the eNaira had only a 0.5% adoption rate. The government’s attempts to lure people from crypto to the CBDC have not exactly proven to be a success in that respect.