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Former Microsoft Engineer Says Nigerian Expatriates Are Using Bitcoin to Circumvent Country’s Overvalued Exchange Rate

Tomiwa Lasebikan, a former software engineer and co-founder of Buycoins Africa, says some Nigerians expatriates now use Bitcoin to circumvent the country’s overvalued exchange rate when sending remittances.

According to Lasebikan, the $1:380 fixed exchange rate of the Central Bank of Nigeria (CBN) robs recipients of 20-30 percent of their remittance value each time they retrieve funds. At the time of publication, according to Abokifx, the parallel dollar exchange rate for Naira is 1:480. 

According to Lasebikan, the $1:380 fixed exchange rate of the Central Bank of Nigeria (CBN) robs recipients of 20-30 percent of their remittance value each time they retrieve funds. At the time of publication, according to Abokifx, the parallel dollar exchange rate for Naira is 1:480. Similarly, when making payments online or across borders, importers hamstrung by the country’s rigid foreign exchange laws are now resorting to bitcoin. Lasebikan says in his interview that Bitcoin often offered Nigerians a chance to pay for utilities or services that the CBN normally usually deems unnecessary. He says: “Another thing would be for people who want to have access to resources outside the country…You want to pay for Nexflix, Apple Music. All of the things the government is aggressively clamping down on.”

The software engineer states that the Nigerian authorities had, prior to this year’s events such as the Endsars protests, “been oblivious to the immense potential of bitcoin.”  Since the lockdown era, the use of cryptocurrency in Nigeria has expanded and the country is now ranked as one of the top cryptocurrency markets. Events in the crypto world in the past 12 months could have helped to shift the Nigerian government’s view of cryptocurrencies.

As a result, as Lasebikan admits, officials will now want to take steps to slow down the adoption of digital currencies by Nigerians. According to Lasebikan, one easy way for regulators to do this is by clamping down on centralized crypto exchanges, introducing more strict KYCs, or driving crypto firms out of the traditional banking infrastructure. Still as Lasebikan notes, this “will not kill Bitcoin or the value of Bitcoin” since the “majority of crypto activities happen in informal channels.” He says that any clampdown would not result in peer-to-peer trading being started through Whatsapp or Telegram’s social media network chat groups.Bitcoin exchange is censorship-resistant and there is no way for Nigerian authorities to stop or reverse transactions. Information of this and other Bitcoin attributes means that the CBN and others will not succeed in their effort to control the digital currency. Knowing this is comforting for crypto users and helps sustain or accelerate the rate of acceptance.

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