recent hike in prices of petroleum products in Nigeria may increase
Bitcoin adoption for cross border transactions and other uses such as
for safekeeping and investments.
the hike is likely to have a transparent effect on inflation which
already hit a 46-month high of 12.8% in March.
Bitcoin adoption grows
Africa’s largest economy of late though. The level of awareness about
the digital currency’s uses have improved particularly for trading and
It would seem more handy now that the disparity between the exchange
rates of foreign currencies such as the US dollar to the naira has
have not been helpful. As of Friday May 13, Western Union calculates its
exchange rate for a US dollar to be 197 naira – that’s excluding the
transfer charge. Whereas in the parallel market, the rate Is 345 naira.
Subsidy removal stimulates the currency black market
increase soon. The government insists that the 67 percent price hike in
the prices of petroleum products brought about by its sudden removal of a
subsidy will not be reversed as it is aimed at tackling months of fuel
shortages in the country.
import the commodity to the country could buy dollars – which is their
main currency of trade – from any source rather than just the Nigerian
central bank or oil companies. This is the caveat that gets many
Co-Founder/Director at SwiftaCorp wrote on his twitter page: “Now that
fuel marketers can get dollar from anywhere to buy product but sell in
Naira, the demand for unofficial dollar is going to triple.”
The black market exchange rate fell to 341 against the dollar from 320
following the decision, Aminu Gwadabe, chairman of the Association of
Bureau de Change Operators of Nigeria, told Bloomberg, on Wednesday May 11, adding that it may reach 380 next week if the central bank doesn’t increase supply in the market.
of plausible implications for the market, there are alleged plans by
the government to make some adjustments to the foreign exchange
management which will likely lead to the introduction of a two-way
regime of a foreign exchange policy. It is not clear if the move is
likely to salvage the value situation.
Maintain naira value through Bitcoin
Bitcoin, instead of the naira, for safekeeping in a Bitcoin wallet or
for a rainy day. This will enable it to retain its market value until it
could be used as wished. It could also be deposited in a bank such as
the Bitcoin Crpto Bank or invested in peer-to-peer lending platforms like The Sun Exchange,
which connects people wanting to invest in solar energy with people who
want to access it. Either way, the conversion of naira into the
cryptocurrency will yield a return.
Investing in Bitcoin by storing it offline in cold storage could also shield its value until the market seems stronger for physical investment.