Crypto market benefits from naira misfortune
The demand for a free and decentralized currency like Bitcoin has increased as the government removes all fiat currencies from circulation.
In addition, the depreciation of the naira on the black market has been blamed on the rise in demand for foreign currency which outstrips bank supply. The main reasons for the demand for foreign currency are to pay unmet demands such as tax debt, school expenses, and import of manufacturing inputs.
Individuals, small businesses, transport companies and farmers who depend on Nigeria’s informal economy – which, according to the International Monetary Fund, accounts for more than half of the country’s gross domestic product – have so far been hardest hit. That’s more than Ukraine’s GDP, about $220 billion.
The Poultry Breeders Association of Nigeria reported that its members had lost over 15 million cases of eggs worth over 30 billion naira due to the naira shortage.
Part of the problem is due to the quasi-colonial payment system on the continent, in which more than 80% of cross-border payments made by African banks are processed abroad, mainly in the United States or Europe. This results in increased expenses and processing times that can sometimes be counted in weeks.
Nigerians use cryptocurrencies for business transactions, to protect their savings when the naira depreciates, and to send money overseas as it is often difficult to obtain US dollars.
Access to commercial bank branches is limited, especially for residents of remote and rural areas. There are also some possibilities for online banking. Money may cease to make sense if extreme hyperinflation, pervasive government corruption and capital regulations that freeze domestic funds in banks are added to it.
According to Ray Youssef, CEO of Paxful, “Normally, if someone wanted to transport money to the neighboring country, they had to fill a bag full of money and move it across the border.
Nigeria’s growth could be further hampered by the most recent disaster. The reason for this is that only 60% of Nigerian families have access to bank accounts, so they mainly use cash for all economic transactions. At the same time, interest in the cryptocurrency market is still high.
All of these intermediaries are eliminated by Bitcoin, allowing users to transmit digital payments directly to each other without using credit and paying multiple settlement fees along the way.
Nigeria, one of the world’s top meta mask markets, ranked third in mobile active users and was among the top ten countries in terms of website traffic for the past month.
With the help of MoonPay, etaMask, the self-custody wallet owned by ConsenSys, has expanded its offerings in Nigeria by allowing users to use instant bank transfers to purchase cryptocurrency directly within the mobile app MetaMask and the Portfolio Dapp. This creates a simpler, efficient and affordable experience for users.
“We are collaborating with MetaMask to offer Nigerians bank transfers, a widely used e-commerce payment method in the country,” said Zeeshan Feroz, chief product and strategy officer of MoonPay. We anticipate that this integration will make it easier for Nigerians to fund their self-custody portfolios.
ConsenSys says buying and selling cryptocurrency can be difficult in Nigeria, with around 90% of attempts to buy cryptocurrency using credit or debit cards fail.
With approximately 12.4 million shoppers, or 5.7% of the country’s total population, Nigeria is now one of the world’s leading markets for metamask, ranking third in terms of active mobile users.
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