Bitcoin (BTC) has seen an exponential increase in demand in Nigeria as the country’s central bank encourages the population to switch to digital cash. As a result, the price of Bitcoin has risen significantly above the global market level.
The cost of one Bitcoin on the Nigerian Crypto exchange NairaEx currently trading at around 17.6 million Naira, the Nigerian currency, equivalent to $38,200 US dollars. This represents an increase of almost 60% compared to the current Bitcoin price of $23,150 at the time of this writing.
Nigeria Bets on Bitcoin and Digital Asset Adoption
The Bitcoin pump on Nigeria’s cryptocurrency exchange comes after the country’s central bank began limiting over-the-counter (OTC) cash withdrawals by individuals and corporate organizations on a weekly basis.
This withdrawal limit policy only allows Nigerians to withdraw a maximum of 20,000 Naira (NGN), worth about $43, from the country’s ATMs per day, and a limit of 100,000 NGN, worth $217.
At letter published in December 2022, where the Central Bank of Nigeria redesigned its policy on cash withdrawal limits, causing a premium to be added to the price of Bitcoin in the African country.
This measure aims to allegedly eliminate money laundering and reduce inflation in the African country, which in the last report Nigeria’s inflation rate was 21.34% in December 2022. It is slightly down from the peak of 21.47%.
The Central Bank of Nigeria also gave Nigerians until January 24 to exchange their higher notes for the new currency. This measure caused unrest in the population; People reported that the deadline was too short, which led to an extension.
Nigeria’s long relationship with Crypto Assets
The Central Bank of Nigeria has come a long way in embracing digital currency. In 2021, the Central Bank issued a circular to all financial institutions to stop providing services to crypto exchanges. It also calls for the closure of the accounts of individuals and companies that actively use cryptocurrencies and trade in digital assets.
A few months later, Nigeria plans to pass a law recognizing Bitcoin and digital assets as capital for investment. This industry has generated a lot of interest and alternatives to various capitals and provides solutions to economic problems in various countries.
This law was enacted after the country’s central bank failed to introduce a Central Bank Digital Currency (CBDC). This digital asset, called e-Naira, was not accepted and adopted by the population last year, with an adoption rate of 0.5%.
Nigeria has also been in talks with Binance, the world’s number one crypto exchange, to develop an economic zone to support crypto and blockchain businesses in the region.
Bitcoin has begun a correction at press time, down 4.6% in the last 24 hours. And 0.1% down in the last seven days in the global market. Investors expect the Federal Open Market Committee (FOMC) meeting tomorrow to have an impact on price action.