Has the Crypto ban in Nigeria Boosted the Naira?

By: Damian Okonkwo

Before the ban placed on the banks from facilitating Cryptocurrency transactions in Nigeria by the CBN On February 5, 2021, the Nigerian fiat currency naira was exchanging at N381 against the dollar. A year and 2 months later, the official rate is now N416 and currently N560 on the streets of Lagos black market services and other black market dealers across the country.

Naira has consistently lost value in the exchange market and judging from the moment the ban on cryptocurrency was effected naira has lost over 12% value so far.

In other words, the naira has not made any minute improvement since the ban was placed suggesting it has not favored the naira in any means or rather not the best way forward.

In hindsight, it seems pertinent to raise the question for fellow economic experts and policymakers to consider to what extent has the recent policy saved the fiat currency from depreciating every day. Could a general adoption of cryptocurrency for Nigeria just like El-Salvador, India, Ukraine, and Russia have been the best option for Nigeria today？

Many believe that it is time for the CBN to reconsider the ban on Crypto transactions involving the banks as a way of strengthening the naira. A case study could be made of El-Salvador's economy today after they adopted cryptocurrency officially in the country.

How can Cryptocurrency legalization boost the Nigerian currency today？

Our experience of cryptocurrency trading from countries where it has been legalized today shows that cryptocurrency transactions are a source of good revenue for the government and support the economy at large. The Indian government for instance after the initial ban on cryptocurrency later rescinded such a decision and legalized cryptocurrency in the country placing a 30% tax on all cryptocurrency trading within the country. What a wise decision and a great source of income for the Indian government. Below are other benefits of legalizing cryptocurrency in Nigeria.

Advantages of Legalizing Cryptocurrency trading in Nigeria

« Revenue Generations: Cryptocurrency exchange serves as a good source of revenue for the government as in-flows come into the country through cryptocurrency trading.

« Income for Government through tax: Cryptocurrency trading provides a good income for Government today through taxes levied on them as practiced by the Indian government today.

« Job Opportunity for Citizens: Cryptocurrency trading provides massive for the jobless citizens as it is easy to learn and provides good profits often when traded effectively.

« Fast Payments for International Business: Many foreign investors today prefer fast payments for goods and services which is made possible through crypto our cryptocurrency payments.