Early this year, the Nigerian government decided to ban financial institutions from associating theirselves with crypto related activities. Their reason behind that was that they want the Nigerian Naira to have value, they blamed cryptocurrency for the devaluation of Naira. What do you expect from a country that also blamed a forex exchange site(aboki FX) that gives the latest forex price, for the devaluation of Naira.
As at the time Nigeria banned cryptocurrency related activities with financial institutions, I think the price of $1 = 360 Naira. This action according to them was supposed to help the value of Naira. But today the price of $1 = 560 Naira. Did they really achieve their goal? It’s obviously No, sometimes trying to understand the government’s level of reasoning is time wasting.
What the government did was, they indirectly created more crypto awareness, because people started wanting to know more about cryptocurrency. Indirectly crashed the value of Naira instead, this is because, crypto is very versatile. Due to its versatility, it always and will always find its support and level. Before the financial institutions started doing crypto transactions, lots of Nigerians have been transacting with cryptocurrencies. I remember selling my first bitcoin in 2016 without complete understanding to what bitcoin was. This was with the help of a friend that used a P2P method to sell it for me.
After the government’s decision, Nigerians decided to switch to the P2P method, which requires no government or bank approval. This led to the surge in demand for cryptocurrencies as most people decided to leave their money in stable coins. Most Nigerian youths right now only use the local currency whenever they want to pay for something, or pay bills. They don’t save their wealth in Naira anymore. The surge in demand for USD to buy more cryptocurrencies led to dollar scarcity, which then led to the surge in Black Market Rate, thereby causing far less demand in Naira.
When the USD rate went up, marchants that depended solely on USD increased the rate at which they transact with stable coins and BTC. Dollar scarcity was also the reason behind it, people started looking for alternatives, with stable coins you can get the dollar rate.
I trust my Nigerians, they will always look for variety of options. Some Nigerians started using pioneer to receive their money. Pioneer gives you access to having a foreign account , what some of them did was convert their crypto to fiat, sent it to pioneer through PayPal and withdrew to their local banks with pioneer.
Lots of centralized exchanges started increasing Nigerians access to P2P. Giving us the opportunity to still get access to cryptocurrencies. All these acts has further help in the devaluation of Naira.