Bitcoin (BTC) has seen an exponential increase in demand in Nigeria as the country’s central bank encourages people to switch to digital cash. As a result, the price of Bitcoin has risen significantly above global market levels.
The Cost of One Bitcoin on the Nigerian Crypto Exchange NairaEx is currently trading at around 17.6 million naira, the currency of Nigeria, which is equivalent to US$38,200. This represents an almost 60% increase from Bitcoin’s current price of $23,150 at the time of writing.
Nigeria Bets on Adoption of Bitcoin and Digital Assets
The Bitcoin pump in this Nigerian cryptocurrency exchange comes after the country’s central bank began limiting over-the-counter (OTC) cash withdrawals by individuals and businesses per week.
This withdrawal limit policy only allows Nigerians to withdraw a maximum of 20,000 Naira (NGN), worth around $43, from ATMs in the country per day, and with a limit of 100,000 NGN, d worth $217.
The published letter in December 2022, during which the Central Bank of Nigeria revamped its policy regarding the cash withdrawal limit, resulted in the addition of a premium to the price of Bitcoin in the African country.
The measure is aimed at allegedly eliminating money laundering and reducing inflation in the African country, which in the latest report of Nigeria’s inflation rate was 21.34% in December 2022. It has come down slightly compared to a peak of 21.47%.
The Central Bank of Nigeria has also given Nigerians until January 24 to exchange their old, higher value banknotes 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 the adoption of digital currencies. In 2021, the Central Bank issued a circular to all financial institutions to stop providing services to crypto exchanges. He also called for the closure of the accounts of individuals and businesses who actively use cryptocurrencies and trade in digital assets.
A few months later, Nigeria planned to pass a law recognizing Bitcoin and digital assets as investment capital. This industry has generated a lot of interest and alternatives to diversify capital and provide solutions to the economic problems of different countries.
This law was implemented after the country’s central bank failed to introduce a central bank digital currency (CBDC). This digital asset, called the e-Naira, was poorly accepted and adopted by the population last year, with an adoption rate of 0.5%.
Nigeria is also in talks with Binance, the world’s largest crypto exchange, to develop an economic zone to support crypto and blockchain businesses in the region.
Bitcoin has begun a correction at press time, falling 4.6% in the past 24 hours. And 0.1% decline over the past seven days in global markets. Investors expect tomorrow’s Federal Open Market Committee (FOMC) meeting to have an impact on price action.