|
Getting your Trinity Audio player ready...
|
Nigeria’s exchange rate crisis is pushing many business owners towards bitcoin (BTC) as a preferred means of buying goods from manufacturers outside the country.
The pressure on naira is projected to be heading towards N480 per dollar later this week. As of Monday morning, the dollar traded N477/$, representing an N2 depreciation compared with N475 sold the previous day on the black market. The weakening in the value of the naira is said to be due to high demand by end-users amid dollar scarcity.
For businesses, the weakening means more pressure as they are unable to get dollars to buy new supplies or order necessary equipment abroad. While the queue in the official market gets frustratingly longer, Bureau De Change (BDC) operators, which are usually the better alternatives, are also unable to meet up with demands for dollars despite selling it at very high rates.
Thus, in recent times a few BDC operators have tried to take education in bitcoin operation.
“Many of them are coming to ask us how it works, and the ones that already know are switching to BTC for international trade,” a source in one of the exchanges in Nigeria, informs Businessday on condition of anonymity.
Bitcoin has been attracting institutional attention since the beginning of the year. The COVID-19 pandemic, which has affected the economies of many countries negatively, has also served to cement the importance of the cryptocurrency as an alternative means of exchange. Peer-to-peer trading volume in bitcoin in countries like Argentina, Chile, Venezuela, and Morocco peaked marking new all-time highs in the month of April.
A study released in May by the Tokenist showed that there was a growing trust in bitcoin over traditional investments like gold, stocks and real estate. The market researchers leveraged a survey that was taken in April 2020 (5,421 participants in 24 countries) and collated several surveys from 2017 as well.
In Nigeria, demand for bitcoin has continued to set records. According to a report by Blockchain.com, Nigeria was the leading country in the second quarter of 2020 in peer-to-peer bitcoin transactional trades valued at $34.4 million on the African continent. Following Nigeria was South Africa; Kenya ($7.8m); Ghana ($640,000), and Tanzania ($600,000).
“There are certainly a lot more use-cases for bitcoin in Nigeria,” Yele Badamosi, CEO of Bundle, an Africa-focused social payments app for cash and cryptocurrencies, told Businessday.
Culled from BusinessDay
