Policies against cryptocurrencies, top Nigerian minister Prince Clem Agba suggests government’s reconsideration.
A Nigerian minister of state for budget and national planning has expressed his support for the nascent cryptocurrency industry.
Nigeria’s central bank restricted commercial lenders from facilitating Bitcoin transactions earlier this year. However, Agba feels that enacting anti-crypto legislation in the country could have dire ramifications in the future.
The minister’s support for cryptocurrency comes as Nigeria’s economy battles inflation brought on by lethargic, COVID-infested economic activity.
According to a Bloomberg article, “the ambiguity in regulating cryptocurrencies risks denying government and citizens the opportunity to maximise the potential from technology.”
According to a recent analysis by the African Development Bank Group (ADBG), the Nigerian economy entered into recession in 2020 due to a drop in crude oil prices as a result of diminishing global demand and containment measures against Coronavirus.
Inflation rate increased to 12.8 percent in 2020, from 11.4 percent in 2019.
In the midst of this economic turmoil, Nigeria and other African nations with access to the Internet began experimenting with cryptocurrency.
According to a survey published in September by Chainalysis, the crypto markets in Nigeria, Kenya, Tanzania, and South Africa grew by 1,200 percent in one year, reaching a market valuation of $105.6 billion (approximately Rs. 775 crores).
Despite the Central Bank of Nigeria’s decision to prohibit crypto-trading, the country did launch the eNaira, a blockchain-based “central bank digital currency” (CBDC) managed directly by the central bank. The eNaira is subjected to daily transaction restrictions and other stratifications.
Several countries, like India and Russia, are debating whether or not to legalize cryptocurrencies due to its decentralized and untraceable characteristics, as well as market volatility.