Bitcoin Price Skyrockets In Nigeria As Banks Limit Cash Withdrawals To $44 A Day

By Kevin • January 30, 2023 10:23 pm • Comments

The price of Bitcoin has recently experienced a nice bullish recovery which has brought good news for all crypto investors across the world as the price currently sits around $23k.

However, in the country of Nigeria specifically, the price of Bitcoin has skyrocketed to even higher prices where the price of the asset has been recorded at $38k.

This is quite interesting because this means that the price of BTC in the country is around 60% higher than the true market value.

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The reason for this premium price is because the Central Bank of Nigeria has apparently started imposing strict limits on the amount of cash that can be withdrawn per day.

Citizens are now limited to being only able to withdraw $44 of cash per day which makes the use of cash extremely inconvenient.

CoinTelegraph reports:

As of Jan. 9, citizens are only allowed to withdraw a maximum of 20,000 nairas (around $43.50) from cash machines per day, with a weekly limit of 100,000 nairas (roughly $217).

The move also came just days before new naira banknotes went into circulation with the aim of curbing inflation and money laundering. The central bank imposed a deadline of Jan. 24 for Nigerians to exchange their old, higher denomination bank notes for the new currency.

However, there were long queues and complaints that there was insufficient time to meet the deadline. The central bank has now extended that deadline to Feb. 10, the BBC reported on Jan. 29.

It is not the first time the Bitcoin premium has surged in Nigeria. In February 2021, the central bank banned regulated financial institutions from providing services to cryptocurrency exchanges in the country, driving the BTC premium as high as 36%.

Besides the bank limits, the country of Nigeria has always had a high level of interest in digital assets which may have contributed to the recent surge in price.

Another thing to note is that inflation in Nigeria is current above 20% which means that the value of fiat currency within the country is continually decreasing substantially each year.

As a result of a weak currency, this will also likely encourage Nigerians to switch to an asset that does not suffer such high levels of inflation.

Bitcoin, being an asset that has limited supply and high demand, will likely help hedge against inflation and it is likely that many financial institutions in the country will start to use it as a way to preserve wealth.

Currently, Nigeria is one of the regions within Africa that has been developing a pro-crypto regulatory environment and is expected to lead the region in mainstream adoption.

Bitcoinist concludes:

The Central Bank of Nigeria has come a long way in embracing digital currencies. In 2021, the Central Bank issued a circular to all financial institutions to stop providing services to crypto exchanges. It also called for the closure of accounts of individuals and companies that actively use cryptocurrencies and trade in digital assets.

A few months later, Nigeria planned to pass a law recognizing Bitcoin and digital assets as capital for investment. This industry has generated a lot of interest and alternatives to diversify capital and provide solutions to economic problems in different countries.

This law was implemented after the country’s central bank failed to introduce a Central Bank Digital Currency (CBDC). This digital asset, called the e-Naira, was poorly accepted and adopted by the population last year, with an adoption rate of 0.5%.

Nigeria has also been in talks with Binance, the world’s number one crypto exchange, to develop an economic zone to support crypto and blockchain businesses in the region.

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