,Cryptocurrency gained more traction last October after Nigeria blocked bank accounts of alleged financiers of popular protests against police brutality. — Reuters
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LAGOS: When Nigerian office worker Chigoziri Okeke bought cryptocurrency for the first time in 2016, he was only looking to make an online payment. But the 10% gain on his wallet’s balance after a few days fired up the 27-year-old’s interest.
Now, the Lagos resident has more than US$50,000 (RM207,187) worth of different cryptocurrencies.
“After my initial purchase, bitcoin’s price spiked a little bit to about US$400-US$500 (RM1,657-RM2,071) per unit,” Okeke told AFP, smiling at his shining computer screen.
“People told me it cost a dollar at some point. So, that motivated me to start investing a certain portion of my salary in cryptocurrency.”
Okeke’s experience reflects the reality of many Nigerians who are playing a key role in the global hunt for bitcoin and other cryptocurrencies in the face of the economic crisis bedeviling Africa’s most populous nation.
Nigeria’s central bank has repeatedly warned against the risks of investing in cryptocurrencies and even ordered local banks to close accounts trading in them.
But more than US$400mil (RM1.65bil) worth of the digital currency was traded in Nigeria in 2020, placing it third globally after the US and Russia, according to global market data tracker Statista.
“It is not a big surprise,” said Andrew Nevin, chief economist for Nigeria at PricewaterhouseCoopers LLP.
“The naira is under incredible pressure,” he said referring to Nigeria’s often unstable currency.
The Central Bank of Nigeria (CBN) devalued the naira twice last year by nearly a quarter in the midst of a dollar shortage that followed a pandemic-induced crash in the prices of crude oil, the country’s major export and source of foreign exchange.
“I haven’t been able to pay my school fees for the past two weeks,” said Akudo Okoro, who recently got admission into a Canadian university, echoing the troubles many are facing over the naira.
“The banks are complaining of dollar scarcity.”
In February 2021, the International Monetary Fund said the naira was still overvalued, raising fears of devaluation.
A weaker naira could stoke inflation, already at a four-year high of 17.3%, and further erode purchasing power of Nigerians.
Bitcoin – the first and largest cryptocurrency – has returned more than 90% gains since the year began.
Cryptocurrency gained more traction last October after Nigeria blocked bank accounts of alleged financiers of popular protests against police brutality.
Supporters donated bitcoin to the group in charge of raising funds for protesters, a move backed by Twitter CEO Jack Dorsey.