Nigeria continues to witness a boom of cryptocurrency operations even though the country's Central Bank has prohibited local banks from accepting cryptocurrencies or risk facing “severe sanctions”.
Regardless of this warning, many Nigerians have chosen to continue using cryptocurrencies, whether it is to make a small purchase online or buy a piece of digital artwork, Reuters reports in a recent article.
Meanwhile, the Central Bank of Nigeria is preparing to launch the ENaira – the country’s central bank digital currency, which is intended to form part of the currency in circulation and be equal to the physical Naira.
The launch, which had been scheduled earlier this month, has been delayed and was recently challenged in the country’s Federal High Court over an intellectual property dispute with ENaira Payment Solutions Limited over use of the currency’s name.
However, in the current regulatory vacuum Nigerians are still using decentralised crypto through exchanges such as Paxful to ensure that their money does not suffer the consequences of inflation, for example.
Nigerian artists have touted the use of crypto. Sly Megida said that he has been able to sell artwork in exchange for crypto which has allowed him to generate income.
According to Chainalysis the numbers of actual cryptocurrency use in the country are difficult to pinpoint because they go through a variety of channels, including Local Bitcoin, Paxful or even in Telegram and WhatsApp channels.
However, the central bank continues to monitor the situation and is not shy to act if it suspects that funds are being sources from what it deems illegal overseas platforms.
Workarounds exist as the use of exchanges allows Nigerians to conclude an economic transaction in crypto but then convert the currency into another one that is agreeable to Nigerian authorities.