Crypto demand in Nigeria keeps rising due to its great economic instability, as well as the implications of government monetary policies and the introduction of a central bank digital currency.
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The Central Bank of Nigeria has been promoting a digital, cashless economy and introduced the eNaira, Nigeria’s central bank’s digital currency (CBDC). So far, adoption rates have been poor. Less than 0.5% of the population reported using the eNaira as of its inception on Oct. 25, 2021.
To further promote the shift to a cashless society, the Central Bank of Nigeria has tightened limits on ATM cash withdrawals, restricting individuals and businesses to withdrawing no more than $45 (20,000 Nigerian nairas) each day and $225 (100,000 nairas) every week from ATMs.
Additionally, there is a weekly withdrawal cap for both people and businesses of $225 (100,000 nairas) and $1,125 (500,000 nairas), respectively.
Any funds taken out in excess of those restrictions would incur a 5% fee for individuals and a 10% cost for businesses. The daily cap for cash withdrawals from point-of-sale terminals is also $45 (20,000 nairas).
While the government withdraws all circulating fiat currency from the market, the demand for a free, decentralized currency like Bitcoin has surged. This led to an inflation of its price, which caused an exponential increase in Bitcoin trades.
At the time of writing, a single Bitcoin is worth an extraordinary 16.2 million naira ($35,000 USD) on the Nigerian crypto exchange, NairaEX. That’s a massive 62% premium over the current global market price of Bitcoin, around $21,600.