As Nigerians have been cut off from access to their own money in the middle of the paper money redesign, Bitcoin is the best chance to reinvent the system.
This is an editorial opinion by Ray Youssef, founder and CEO of Paxful and founder of the Built With Bitcoin Foundation.
Imagine standing in an endless line, fighting to get hold of your own money. Read it again and try to figure it out. This is life for millions of Nigerians today, who are faced with the redesign of the paper currency, the naira, which means the old naira bank notes will be worthless after February 10. This is a problem because when Nigeria hopes to get closer to digital cash. economy, the country is still heavily dependent on cash. The policy led to a flood of people at bank offices and ATMs, desperate to exchange their old bank notes for the new redesign.
Adding fuel to the fire, the Central Bank of Nigeria (CBN) has imposed a weekly cash withdrawal limit which, as of January 9, was 500,000 naira for individuals (about $1,087) and 5,000,000 naira (about $10,087) for organizations. While this weekly limit may seem crazy, the actual amount that Nigerians can withdraw depends on what is available in each location.
What is happening on the ground in Nigeria
My team in Nigeria witnessed queues all day – with many people walking empty-handed. Some bank offices and ATMs don’t even have money to dispense. Nigerians bring mattresses to the ATM and others arrive at the ATM at 4:00 am to be number 115 when it opens at 8:00 am. new record. I heard that after returning the old notes to the bank through their children or agents because most of them don’t have banks, they can’t get new notes. This affects our daily transactions and livelihoods. And for individuals who can afford naira, point-of-sale (PoS) transaction fees have increased by 400% in most cities across the country. This has caused fear as inflation has been over 20% and Nigerians are struggling to keep up with the cost of living.
Source: Paxful
This is all happening in the run-up to the all-important general election on February 25. The monetary and political collision has caused its own chaos – as political parties in Nigeria have threatened to boycott the election if the February 10 deadline is pushed back. They believe that less cash in circulation will reduce election fraud and vote buying. Beyond the election, supporters of the redesign also believe that Nigerians are hoarding cash – and take a better sense of money circulating in the economy, they can better tame inflation.
Bitcoin Can Solve This
Nigeria has shown the world that Bitcoin can be a solution. Mass adoption won’t happen overnight, but it will end these terrible bottlenecks. Money is a human right and people should not wait in line for days for their own money. The beauty of Bitcoin is that when it is not connected to a central authority, it is can strengthen the national economy. Bitcoin has been proven to do this by lowering inflation, giving more access to the economy, increasing transparency and acting as a universal money translator. Through the Lightning Network, Bitcoin can also bring international wealth and employment – ​​by connecting the global value chain, Nigerians can receive payments for these services quickly and for free.
Breaking the Global Monopoly On Wealth
For too long, people in countries like Nigeria have held guns to their heads. If the Nigerian government tries to advance the economy by exploiting its people and flooding the economy with money, it will get a call from the International Monetary Fund (IMF) telling it to buy Western currencies at a premium for fuel. ups its economy. Otherwise, the IMF can use price discovery controls to devalue the local currency.
This is not unique to Nigeria, it is happening all over the Global South. This is the reason why the region remains poor while its natural resources and youth population are growing. So, sadly, there will never be a Global South version of The New Deal, the right only applies to the West. But instead of implementing policies like restrictions on cash withdrawals and currency exchanges, I am asking the Nigerian government to lean towards Bitcoin and allow the economy to grow. Through Bitcoin, it can open up the Nigerian economy to more international jobs, protect Nigerians from economic volatility and reduce dependence on international centralized powers. Prosperity for everyone, powered by Bitcoin.
This is a guest post by Ray Youssef. Opinions expressed are entirely their own and do not necessarily reflect those of BTC Inc or Bitcoin Magazine.