In Nigeria, with the lack of U.S. Dollars and its weakening currency (Naira), companies are relying on bitcoin as a means of settling payments for international transactions, as Nigeria’s inability to meet common foreign currency alternative outlets is unable to meet the increasing demand for dollars. Nigerian companies need Dollars to buy new products, as well as order vital foreign equipment.
However formal foreign currency outlets such as banks fail to reach this demand. Thus, Nigerians are adopting cryptocurrencies as a large number of wallets downloaded for the cryptocurrency. people are also getting more aware and informative about cryptocurrencies and bitcoin.
Nigerian publication, Business Day, and Bureau De Change BDCs report finds that the foreign currency in Nigeria is unable to meet the high demand for Dollars and also few BDCs have tried to take up a bitcoin operating education. And many business people start asking us how this works and want to turn to BTC for foreign trade. by the local reality television show, Big Brother Naija, and organizing bitcoin quiz all contestants received $500 in bitcoin.
In Nigeria, cryptocurrencies have gained momentum because of their use as a tool for settling cross-border payments and money transfers. The global pandemic and its related travel restrictions seem to have sparked a new wave of bitcoin demand. Adding to this, data from Bitcoin.com reveals that of the 18,613 wallets downloaded globally between 16 and 10 August, about 3,473 were from Nigeria. The US had about 2,802 fewer wallets downloaded followed by India which had about 1,420 downloads.
Philip Anegbe, Team Lead CardinalStone Research explained in detail the deficit crisis across its fiscal, faced by the Nigerian currency (naira). Nigeria is facing a twin crisis and current account books, and these deficits are likely to widen with low oil prices. The sad part is that there is a lack of inflows through financial accounts that can help bridge the current account balance of payments gap.
Nigeria is seeking more than $6 billion in financing from the World Bank, the AFDB, and the IMF, as well as debt relief from previous foreign debt. As it is unlikely that the government will obtain all the foreign borrowing needed to bridge the deficit.