Nigeria is Africa’s largest economy, but its currency is getting weaker and inflation is going up, according to a report released Tuesday by a blockchain research business in New York.
Between July 2022 and June 2023, the amount of crypto trades in Nigeria grew by 9% year over year to $56.7 billion. The amount of crypto used in Uganda is small but growing quickly. In the same time period, its use rose 245% to $1.6 billion, while in Kenya it fell more than half to $8.4 billion.
When the value of the naira dropped, especially in June and July of 2023, people in Nigeria became more interested in bitcoin and stablecoins. Stablecoins are crypto tokens whose value is tied to a stable asset to protect against wild instability.
After President Bola Tinubu started some of the most bold changes Nigeria has seen in years, like getting rid of a popular but expensive gasoline support and removing some exchange rate restrictions, the currency dropped to all-time lows.
“People are always looking for ways to protect themselves against the devaluation of the naira and the persistent economic decline since COVID,” Moyo Sodipo, co-founder of Nigeria-based cryptocurrency exchange Busha, said in a statement shared with the story.
In 2021, Nigeria’s banks and financial institutions will no longer be able to deal in or help with trades involving cryptocurrencies.
The country’s financial body put out a set of rules for digital assets last year. This showed that Africa’s most populous country was trying to find a middle ground between a complete ban on crypto assets and their use without any rules.
The young, tech-savvy people of Nigeria have jumped on board with cryptocurrencies. For example, they use peer-to-peer trading on crypto exchanges to get around the ban on the financial industry.
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