Key facts: The naira fell to record lows last year, amid an economic crisis. Nigeria stands out as a country with high bitcoin adoption. The naira, Nigeria's national currency, has been recovering, barely taking a slight step after falling to a record low last February. The latter came as Africa's largest economy experiences a crippling dollar shortage that has forced many to turn to alternatives, most notably bitcoin (BTC). It is nothing new, since The economic crisis that Nigeria is going through has plagued the population for years. from that African country, where bitcoin has become an escape valve. The data confirms this, since 35% of the Nigerian population between 18 and 60 years of age had cryptocurrencies or exchanged them during the first half of 2022, as reported by BitcoinDynamic in the past. Currently some analysts predict that the naira will recover steadily. However, Ralph Mupita, CEO of Africa's largest telecommunications operator, MTN Group, today said the naira will remain volatile after devaluing 96.7% up to December last year. What happened in Nigeria with the Naira, It is a sample of what happens when the State fails its citizens. This is suggested by macroeconomic analyst Lyn Alden, who has referred to the case of this African country as an example of how fiat is now the broken money that impacts the lives of the people who inhabit the globe.
“There are more than 160 currencies in the world, and each of them is a centralized ledger. Many of them lose value quickly; This is the most recent example, which affects more than 200 million people.” Lyn Alden, macroeconomic analyst about the case of Nigeria.
Nigeria has been recording a high volume of P2P bitcoin trading, after access to cryptocurrency platforms was blocked. Source: LynAlden/X.
The Naira is devalued, but who is to blame?
The devaluation of the naira was caused by several factors, including the fall in oil prices, which is the country's main source of income, corruption and state economic mismanagement. Also the lack of economic diversification and political and social instability were part of the factors that contributed to the devaluation of the naira. However, the Nigerian government recently has held bitcoin industry actors responsible and other cryptocurrencies, arguing that they are having a negative impact on the country's economy through platforms that manipulate exchange rates. Last month, an advisor to the president of Nigeria called for Binance, KuCoin and other bitcoin and cryptocurrency trading exchanges to be banned in the country. Bayo Onanuga, information and strategy advisor to President Bola Tinubu, X came to claim that These companies manipulate the naira, contributing to the decline of the currency Nigerian in the foreign exchange market. Meanwhile, the Nigerian government has been tightening regulations on cryptocurrency exchanges in recent months. It even carried out a full-scale crackdown on non-payment of taxes by unregistered brokerage houses. In the search for those responsible for the devaluation of the naira, the Nigerian government also asked Binance to provide the names and transaction details of top 100 cryptocurrency users in Nigeria. This occurred in mid-March, when Nadim Anjawala and Tigran Gambaria, key figures in Binance's African operations, were arrested. The executives remained detained without charge in an act that is still not entirely clear. Meanwhile, the case of Nigeria and its devaluation of the naira continues to show what can happen anywhere in the world when the State fails.