Nigeria Leads U.S, Vietnam, Switzerland In Crypto Penetration.

By InsideBusiness On Feb 15, 2021

Despite the clampdown on it in Nigeria, Cryptocurrencies valued at N400 million is within the country’s financial system, representing 32 per cent penetration and leading other bigger economies like the United States where paltry 6 per cent Bitcoin and others are owned or used in 2020.

Data published by Trading Platforms UK shows that Cryptocurrencies’ acceptance in Nigeria’s is five times higher than the United States while Vietnam is ranked second at 21 per cent, followed by the Philippines at 20 per cent while Turkey is fourth at 16 per cent.

Peru is sixth with 16 per cent of people that owned or used cryptocurrencies last year. Other countries with high digital asset usage include Switzerland with 11 per cent, China 6 per cent, Germany 5 per cent, and Japan 4 per cent.

Nigerian Central Bank had, in a February 5 circular, instructed Deposit money banks (DMBs), non-bank financial institutions (NBFIs), and other financial institutions (OFIs) to close down the accounts of persons or entities involved in cryptocurrency transactions within their systems in a move that sparked outrage from Youths across the country with many demanding that the ban be reversed.

Among the critics of the move by the CBN is Kingsley Moghalu, former deputy governor, CBN who lashed out at the apex bank advising rather that it should find means of regulating it instead of an outright ban.

Although banks in the country had earlier been forbidden, through CBN’s circular dated January 12, 2017, and also reiterated in another CBN Press Release dated February 27, 2018, not to use, hold, trade and/or transact in cryptocurrencies, the Trading Platform report, however, shows that Cryptocurrencies worth N400 million was in the Nigerian system in 2020 and ranking third in Bitcoin transaction volume after the United States which has the highest Bitcoin transaction volume of $1.52 billion in online exchanges in 2020, followed by Russia at $421.38 million.

Europe (rest of) is fourth at $204.4 million with the United Kingdom capping the top five at $193 million.

Other countries that recorded a significant number of Bitcoin trading volume include Colombia ($147.49 million), Kenya ($91.96 million), South Africa ($87 million) and Canada ($65.56 million)

The driving factors behind the Bitcoin trading volume according to the research report include diversification to Bitcoin owing to the stock market collapse in Q1 2020 as a result of the economic crisis from the pandemic.

During the year, the asset largely remained resilient even as the stock market collapsed globally. Developing countries like Nigeria also recorded a significant Bitcoin trading volume mainly motivated by the fact that these countries witnessed a devaluation of their local currencies compared to the dollar.

Over the years, more people have become aware of the asset, with regulators making efforts to define the crypto sector clearly. Worth mentioning is that some countries have recorded a significant cryptocurrency awareness, but the legal topic remains a challenge.

Another analyst who prefered anonymity blamed CBN for its move states that the apex bank is ‘always going beyond its bounds rather than concentrating on other important issues like interest rates, inflation and exchange rates.’

Speaking further he said, ” it’s a shame for government with digital economy ministry not to know the relevance of cryptocurrencies and not finding a way of knowing more and trying to benefit from it.