THELOGICALINDIAN - This casestudy will focus on Bitcoins acceleration in Nigeria It was partially aggressive byaquestion from Bloombergs Joe Weisenthal about what allowances does Bitcoin accompany to bodies active amidacurrency crisis
Throughout 2024 and the aboriginal bisected of 2024 the Nigerian budgetary authorities called the NGN at an artificially able amount of 200 Naira to the USD aloft the chargeless bazaar calm rate. As a result, a atramentous bazaar for adamantine currencies (the USD, GBP, EUR, etc.) developed.
As a aftereffect the authorities accustomed a large devaluation of the Naira in June 2016. However, the official Naira bazaar was not alone absolutely to a chargeless float. The Central Bank connected to peg the USD/NGN at a new, cheaper amount and so the atramentous bazaar remained.
The exceptional on USD awash in the atramentous bazaar is the gap amid the dejected band and the white (spot) band in the blueprint below. The June 2024 abasement decreased that exceptional but did not abolish it. The exceptional connected to abound thereafter.
This is the book for millions of Nigerians. You are a Nigerian alive abroad with ancestors aback home to whom you ambition to address money. You are earning USD, EUR, GBP, ZAR, or other almost adamantine African currencies in adjoining countries. So how does one address USD and get the best acknowledgment in NGN?
USD $100 =NGN 33,750
The Sender sends USD but the Receiver cannot abjure USD from the bounded Western Union appointment — they may alone abjure NGN.
These are the rates for USD remittances beatific to Nigeria by Western Union. USD $100 buys 37,500 gross. Of course, there will be ample Western Union fees in addition, about 10% of the sum, so the ancestors receives 90% of NGN 37,500 = NGN 33,750
2. Bank Wire
USD $100 = NGN 32,000
When sending USD to your ancestors in Lagos, for example, they are afresh clumsy to abjure USD banknotes from the Nigerian bank. They can abjure NGN from ATMs at the amount of $1 = NGN 320. This is worse than Western Union. Afresh there will be abundant added fees to pay by both the Sender and the Receiver.
Users in Nigera may accelerate funds internationally application PayPal but cannot accept funds.
Compare the bound functionality of PayPal for Nigeria with PayPal for New Zealand, area users can Send and Receive funds internationally.
Even if PayPal did action abounding functionality to Nigerian users, they could alone abjure funds to their coffer accounts and get the poor official USD/NGN rate.
Send BTC to a family affiliate in Nigeria and they advertise them (legally) for NGN at LocalBitcoins.com :
Today, February 2nd, 2024 1 BTC = $980 USD.
USD $1 = 470,000 / 980 = NGN 479
USD 100 = NGN 47,900
There are no fees to pay added than a tiny Bitcoin Transaction Fee, conceivably $0.50.
Black bazaar ante for banknote US dollars.
$1 = NGN 495
$100 = NGN 49,500
Most bodies in the West accept never acclimated a atramentous bazaar to advertise adamantine currency. The action is the aforementioned in every country and beyond time. It is like buying marijuana. (I aboriginal bought Durban Poison in the Malay Quarter of Cape Town in 2024. I aboriginal acclimated a bill atramentous bazaar as a University apprentice traveling in Warsaw Pact Poland in 2024.)
It is consistently an actionable action amiss beneath bent law (and by afterlife in North Korea). You booty your backing of dollars to a artery bell-ringer and he gives you the bounded bill — NGN — in exchange. It is an afflictive transaction. You are at accident to both artifice by the bill bell-ringer who ability accumulation affected bill and imprisonment by the police.
To summarize, Banknote Dollars catechumen to the greatest bulk of bounded Nigerian bill but there charcoal a problem: How does the departer Nigerian bear concrete banknote dollars to his ancestors in Nigeria?
Using Bitcoin is a abutting cardinal 2 in agreement of the absolute return, but does not appointment the botheration of physically alteration bill to the destination. And affairs Bitcoins for NGN on LocalBitcoins.com is not a crime, admitting affairs USD for NGN in the atramentous bazaar is a crime.
*PayPal does not assignment in Nigeria
This is a abundant video about Jacob Hansen, a Dane, affairs Bitcoin for Argentinians Pesos in Argentina in 2013 and benefiting from the atramentous bazaar amount for adamantine bill (before LocalBitcoins.com, face to face affairs were necessary).
Sure, it makes faculty for Nigerians to use Bitcoin to aerate the amount of their remittances. But are they, in fact, application Bitcoin?
We accept three means to apart verify absorption in and use of Bitcoin in a specific economy:
Local Volume Bitcoin Charts on Coin.Dance is a advantageous ability but abstracts are is bare for Nigeria.
Nigerians are the best cogent users of LocalBitcoins.com globally.
Note that Nigeria and Venezuela (population 30 million) are included in the Top 5 of LocalBitcoins.com Visitors. Both economies accept atramentous markets for USD. India takes #3 position; its arresting position ability be accompanying to the accepted abolition of high-denomination banknotes in the Indian economy.
The abundant absorption in Bitcoin in Nigeria is accepted by Google Trends:
So it’s bright that Bitcoin can add abundant amount to the lives of Nigerians amidst their bill crisis. Moreover, abounding Nigerians are absolutely application Bitcoins [or are at the actual atomic acceptable absorbed in application it]. Up-to-date abstracts and FX ante for all-around bill atramentous markets is accessible at my website Blocklink.info.
Do you accede that Bitcoin is the best advantage to accelerate money to Nigeria? Share your thoughts below!
Images address of Alexa, LocalBitcoins, Coin.dance, CATO institute, reddit, Twitter, Western Union
