As inflation continues to rise and cryptocurrencies gain acceptance as a viable alternative to conventional assets, a growing number of individuals are hopping on board as crypto investors. Nigeria is one of the nations where this tendency is most pronounced, according to research.
According to a press release published on April 12, a recent report by KuCoin, one of the market’s leading cryptocurrency exchanges, revealed that 33.4 million Nigerians, or 35% of the country’s population between the ages of 18 and 60, are either current cryptocurrency owners or have engaged in crypto trading in the previous six months.
Additionally, the “Into the Cryptoverse Report: Nigeria Edition 2022” revealed that 52% of Nigerian cryptocurrency investors spend more than half of their assets on cryptocurrencies. While 65% of crypto investors use peer-to-peer trading to convert money to cryptocurrency.
Finally, 70% of Nigerian crypto investors said that they intended to increase their holdings in the next six months, “indicating that digital asset adoption in the nation is growing,” according to the press release.
What is driving Nigeria’s rapid embrace of cryptocurrency?
According to the survey, there are various explanations for this country’s high rate of cryptocurrency acceptance.
“The first is that there is a scarcity of cheap financial services. While the economy is primarily reliant on remittances, a sizable percentage of the population lacks access to bank accounts, and money transfers are sluggish and expensive.”
Second, the quality of living has declined, while unemployment rates have increased, “driven by a combination of Naira devaluation and goods and service inflation.”
“Cryptocurrencies have so developed into viable alternatives for asset storage and transfer,” the research said.
The third factor is that Nigeria’s population is very youthful, which makes the nation more receptive to embracing a digital economy.
Meanwhile, according to Finbold, an International Monetary Fund (IMF) analysis suggests that individuals in countries with a higher degree of corruption are more prone to utilize cryptocurrencies in other countries, advocating for more stringent international regulation of digital assets.
“Because crypto-assets are anonymous (transactions need just digital identities), they may be used to facilitate illegal flows, including profits of corruption,” the IMF research noted.
Notably, Nigeria was placed 154th out of 180 nations on Transparency International’s Corruption Index in 2021, with South Sudan ranking as the most corrupt at 180th and Denmark ranking as the least corrupt at first.
Additionally, it’s worth noting that Nigeria’s central bank recently fined four banks about $2 million for allegedly enabling cryptocurrency trades in 2021. The Nigerian Central Bank (CBN) views digital assets as a threat to the country’s financial system.
Also Read: Inflation In The US Jumps To A New 4-Decade High Of 8.5 Percent In March
Wallets