Nigerian cryptocurrency adoption surges despite govt crackdown
Nigeria’s cryptocurrency usage increases despite the heavy crackdown by the country’s government. The surge was recently recorded as Bitcoin’s peer-to-peer (P2P) trade volume registered its second strongest week in July.
According to Google Trends data, Bitcoin’s P2P trading denominated in the Nigerian Naira has gradually increased in 2021, with Nigeria’s rank as the second-largest in P2P BTC’s trading market, next to the United States. The data also shows Nigeria rank by number in search interest for keyword “Bitcoin” at the time of writing on August 2.
Luckily for Nigeria, the Bitcoin adoption rate’s growth has tremendously helped Sub-Saharan Africa emerge as the greatest in the region, according to P2P volume. The region currently posted $18.8 million as its weekly volume, beating out North America’s $18 million the last week.
Speaking of conditions that led to the growth in cryptocurrency adoption, tensions had escalated in Nigeria after massive civilian protestors opposed police brutality leading the infamous police unit “Sars” to sweep across the nation. As the “EndSars” protests gathered momentum, protestors across the country were attacked with water cannons and tear gas, killing 50 civilians and a dozen shot by the police with live ammunition on October 20. The common analyst perception is that the confluence of economic meltdown, social repression, political upheavals, rampant inflation and financial controls has spurred the surge in cryptocurrency adoption.
It was then that the government crackdown started, triggering economic repression of social organizations that supported the civilian protestors with food and medical aid. These social organizations in no time found their bank accounts being frozen by the Nigerian government. Amid the rising tensions and violence, protestors increasingly turned towards cryptocurrency trading and exchange for transferring their economic activity outside the government’s control.
Founder of Gatefield, Adewunmi Emoruwa, whose bank accounts were suspended by the Nigerian government for providing grants to media persons covering the protest, has expressed the government’s hostility towards cryptocurrency, saying that he believes “EndSars is like the key catalyst” for most of the legal actions the government is making against cryptocurrency wallet holders. According to Emoruwa, the October protests caused “fear” among the bureaucracy when they saw that ordinary civilians could “bypass government institutions to mobilize.”
Another source privy to naming, confirmed that their bank accounts were also targeted during the upheaval as theirs was also categorized under social organizations supplying food to protestors. The source further added that due to frozen accounts, the company has been paying employees’ salaries through cryptocurrencies.
Although the government banned banks from processing any sort of crypto coins or tokens in February 2021 in order to crackdown on digital assets, Nigeria’s rising P2P Bitcoin volumes indicate that its crypto traders have moved mainly underground to escape government scrutiny.
Surprisingly, the government received internal criticism for legal action against digital assets when Vice-President Yemi Osinbajo publicly rebuked the crackdowns. In addition, Nigeria’s central bank also expressed in late July that they are exploring potentials for a central bank digital currency (CBDC).