Auteur : BBC
Site de publication : BBC
Type de publication : Article
Date de publication : February 2021
More cryptocurrency trading goes on in Nigeria than almost anywhere else in the world, reflecting a loss of faith in more traditional forms of investment, as Ijeoma Ndukwe reports.
A 2020 online survey by data platform Statista found that 32% of those Nigerians who took part used cryptocurrencies, the highest proportion of any country in the world. Estimates show that of the top 10 countries for trading volumes, Nigeria ranked third place after the US and Russia in 2020, generating more than $400m worth of transactions.
Although Nigeria has eased out of its second recession in less than five years, the challenging economic climate remains, making alternative sources of income and alternative currencies attractive
The Central Bank of Nigeria devalued the currency, the naira, by 24% last year. There are fears of a further fall in value by as much as 10% this year. Meanwhile prices continue to rise, with food inflation climbing to its highest point since July 2008.
“On some of my currencies I’ve made 50 times what I invested. On Bitcoin it’s easily grown 10 times in the last year,” he says.
The former banker sees cryptocurrency as an evolution of finance, describing it as “finance 2.0
Despite the currency’s volatility, Mr Ugwu sees it as a valuable tool to “hedge” or reduce the risk of living in what he describes as a high-risk environment.
“It wasn’t about making money. It was about how [to] have a better banking experience. Look at it as saving your money in a currency that can keep the value of the money.”
There are legitimate concerns that Bitcoin’s soaring value is a speculative bet that will one day leave many in ruins.
An international banker based in Nigeria, who asked to remain anonymous, says it is a financial product that carries significant potential regulatory risk. He says that “governments and central banks have not decided whether they can, or should, regulate it”.
“On a technical level I’m not 100% sure that the security that it uses is entirely foolproof. I think there are still some technical uncertainties,” he adds.
In an effort to regulate the market, Nigeria’s central bank banned banks from facilitating cryptocurrency-related transactions in 2017, but the ban remained largely unenforced.
However, this year the institution doubled down on its stance.
In a statement released on 7 February it cited the need to protect the general public and safeguard the country from potential threats posed by “unknown and unregulated entities” that are “well-suited for conducting many illegal activities”. Since then, many Nigerians have reported that their bank accounts have been frozen due to cryptocurrency-related activity.
However, not everyone has been so fortunate. One source says his bank account was frozen two weeks ago with tens of thousands of naira in it. The software engineer says the bank would not disclose the reason for its actions. He suspects he was targeted for running a cryptocurrency remittance business.
However many investors with the possibility say they will continue to trade using their overseas bank accounts. They say they can easily revert to peer-to-peer transactions. This means that rather than transferring funds between a financial institution and a cryptocurrency online trading platform, investors transfer funds directly to each other or through a middle person as they buy and sell.
This is the method the cryptocurrency community used before the development of the virtual currency marketplace ecosystem in Nigeria.
A former Deputy Governor of the Central Bank, Kingsley Moghalu, believes that the country should engage and manage the risks “rather than just shutting it off completely – especially to the extent that it provides livelihoods for many people in a depressed economy”.
There are also fears that cryptocurrency could become a missed opportunity, according to Gbite Oduneye who heads EGM Group, a Lagos-based brokerage firm.
Nigeria is the third largest place for cryptocurrency trade in terms of volume,” he explains. “If you don’t take advantage, someone else will. Build an ecosystem round it. Put in rules and regulations.
Nigerians also see cryptocurrencies as a way to get around foreign currency restrictions.
“There are a lot of restrictions on what we can and cannot do with our foreign exchange,” Nena Nwachukwu from popular trading platform Paxful explains.
At the heart of the rise of Bitcoin is a distrust of centralised financial systems and top-down economic control, investors say. Many express their frustrations with government policy and the decline of the Nigerian economy. None more so than Mr Fadugbagbe, who spent years struggling to scrape by as what he describes as a “minimum-wage slave”.
“I don’t do shares and government bonds”, he says. “Those are scams. I trust cryptocurrency more.”.