crypto currencies can have a considerable impact on developing countries, by increasing financial inclusion of individuals and companies. In particular, by reducing the transaction fees and time, cross-border payments can be improved. This is beneficial for remittance payments, peer-to-peer lending and international trade. The underlying technology also supports the fight against corruption by having a more transparent tracking system for the use of funds.
However, all these benefits heavily depend on the mass adoption of crypto currencies and the fulfillment of all three functions of money, and this is currently not given because of excessive price volatility. The lack of back-up and centralization does not support a stable price level A stable price level could be reached by stronger regulation and more political support for crypto currencies. However, crypto currencies can only get political support, if government or central banks have control over the money supply. Nonetheless, this would reduce many benefits crypto currencies have.
Currently, crypto currencies support the growth process of the developing countries in very limited ways. The future development heavily depends on the regulations that will be introduced, the resulting price stability and adoption of crypto currencies.
Effect of Cryptocurrency and Crypto Exchanges in Nigeria
Nigeria is seventh most populous country, and most populous in Africa. Nigeria also has the largest economy in Africa, with more than $500 billion of nominal gross domestic product. The Word Bank considers Nigeria to be an emerging market and is widely seen as a perspective economy. Still, it ranks 152nd in the Human Development Index and has a large variety of problems regarding the lack of education, organized crime and human rights. Bitcoin is legal in Nigeria, but the Nigerian SEC, or Securities and Exchange Commission, warned citizens about cryptocurrency investments being risky and sometimes even fraudulent. However, the Nigeria Deposit Insurance Corporation and the Central Bank of Nigeria have plans to adopt cryptocurrency technology and have several sub- committees working on implementing blockchain into governmental insurance and financial services.
In 2019 Google Trends, Lagos, Nigeria was the number one city based on online search volumes for Bitcoin worldwide. While recently, in May 2020, Arcade Research ranked Nigeria fifth globally with its 11% of connected Nigerians owning or using cryptocurrencies.
In addition, data obtained from Coinmarketcap recently revealed the largest cryptocurrency users around the world, with Nigeria surging by 46% among its youth users. As a country, These trends have shown that Nigerians do have a high passion for digital currencies and are among the greatest users of cryptocurrencies in the world. This is based on a major fact that Nigerians are using cryptos to avoid expensive and heavily bureaucratic money transfer systems currently available. Many Nigerians rely on remittances for their daily activities and any way of making the process effective cheaper would be of great benefit to them, this is where Bitcoin comes in. What you need to know: Cryptocurrency is basically, a digital currency based on an innovative technology called the blockchain. Its users range from small businesses to process payments, financial tech-based startups, and retail consumers that use it to send money across the border and as an investment asset.
However Nigeria’s central bank issued a statement about three years ago banning the use of bitcoin for transaction purposes, this statement was sent to all banks in Nigeria warning them against facilitating the trading of cryptocurrencies but that seems not to pause Nigerians growing love for cryptocurrencies.
In Conclusion, Due to the many cases of fraud, online traders often do not accept payment from Nigerian credit cards. This is another reason for the popularity of BTC among buyers. Due to the specifics of cryptocurrency, such a transfer cannot be blocked.
Residents of countries with unstable economic and political situation know for themselves that everything connected with money is inseparable from fraudulent schemes, fake wallets and pyramids, because the state does not pay attention at it at the moment. Crypto users in Nigeria have created everything possible in order to ensure that the market is safe for its participants, even if they have to use the most primitive methods for this.
