Despite a ban from their country’s central bank, people in Nigeria have turned to cryptocurrency to conduct business, send payments and guard their savings.
As Reuters noted Tuesday (Oct. 12) in their look at the popularity of crypto in Nigeria, the dollar value of cryptocurrencies sent from Nigeria rose to $132 million in March, up 17% from the previous month. In June, transactions were 25% higher from June 2020.
The story explores the issue through the eyes of artists in Nigeria who use crypto to sell their works, such as Sly Megida.
“The naira is digressing, and we are trying to keep the value of the art,” Megida said, calling crypto “the currency where people don’t think that I am paying too much or too less.”
The Central Bank of Nigeria warned the country’s banks in February that it would face “severe regulatory sanctions” for working with cryptocurrencies. It also froze the accounts of businesses the central bank said were using crypto.
Meanwhile, trading on platforms like Paxful and Yellowcard have skyrocketed. Paxful, for example, saw a 57% rise in trading volume in the 12 month period that ended in June, while its user base rose by 83%.
And with users also exchanging crypto for the naira and other currencies with people they connect with via WhatsApp and Telegram, crypto use in Nigeria might even be higher than what the numbers suggest.
As PYMNTS noted in September, Nigeria ranks third on the planet in terms of countries with the highest bitcoin trading volume for 2020, behind the U.S. and Russia.
Transactions worth more than $400 million were generated in Nigeria last year, with more than 1.1 million cryptocurrency trades registered per month on Paxful.
Still, using crypto can be a risky game in Nigeria. In August, the country’s central bank froze the accounts of users they said were sourcing funds from illegal foreign exchange dealers. That left many companies using cryptocurrencies reluctant to speak about it.