After El Salvador, is Nigeria the next country to embrace Bitcoin?

Original title: "Will Nigeria be the next country to accept Bitcoin?"
By Reynaldo Marquez
Compiled by: Blockchain Knight

There has been much speculation about the next country that could see mass adoption of Bitcoin. The excitement surrounding El Salvador’s new law granting Bitcoin legal tender status has led to many politicians and government officials around the world expressing their support for Bitcoin adoption legislation following the bill’s approval.

Meanwhile, some prominent figures have called on their governments to adopt the Bitcoin standard. NFL professional football player Russel Okung sent a letter of advice to the Nigerian government, saying it should follow El Salvador’s lead.

His argument is based on the idea that “every country will eventually adopt Bitcoin, and the countries that adopt Bitcoin first will benefit.” Okung claims that Nigeria is suffering from the effects of central banks, inflation, and fiat currency .

As a recent report from Arcane Research points out, Bitcoin adoption is on the rise in Nigeria . As shown in the chart below, the number of Nigerian users on the Luno wallet has grown exponentially since January 2017.

In January 2020, the number of users was around 1 million users, and there are currently over 2.5 million active users, with Arcane Research claiming: "It is clear that Bitcoin adoption is growing in Nigeria."

Meanwhile, Nigeria’s P2P Bitcoin trading has skyrocketed, so Nigeria could do well to follow El Salvador’s lead. Nigerians are using Bitcoin without government or regulatory mandates. Further data from the report shows that Bitcoin trades an average of $30.5 million per month on P2P platforms.

This number has been rising in 2021, and as a result, Nigeria is the second largest country in terms of Bitcoin P2P platform trading volume this year, second only to the United States .

Still, it seems unlikely that Nigeria’s government, which, as Bitcoinist previously reported, is one of the most corrupt in the world, will adopt Bitcoin. In the past, the country’s national regulators have attempted to ban Bitcoin and all cryptocurrency-related transactions, but the move was retracted when the fiat currency plummeted in trading pairs with Bitcoin.

Arcane Research concluded that Nigeria’s policies are hostile to Bitcoin and that this situation seems unlikely to change in the short and medium term .

The Nigerian government is apparently trying to use central bank digital currency (CBDC) as an alternative . According to a report by news website Toutiao, Nigerian officials will launch a digital currency by December 2021.

Rakiya Mohammed, director general of Nigeria’s Information and Technology Department, noted: “Digital currency will be open to all Nigerians. Just like everyone has access to cash, everyone can use the central bank’s digital currency. But cryptocurrencies such as Bitcoin are not controlled by the central bank, they are purely private decisions made by individuals.”

The move could put more pressure on the private sector to abandon Bitcoin in favor of a government-backed CBDC. As many experts have pointed out, these digital assets are the exact opposite of Bitcoin and could compromise the privacy of individuals, in which case the people will truly make the decision.