Nigeria shows what can happen to the world when the state fails

Important facts:
  • Amid the economic crisis, the Naira fell to a record low last year.

  • Nigeria stands out as a country with high Bitcoin adoption.

Nigeria’s national currency, the naira, is recovering, barely making a small move after falling to a record low last February. The latter comes as Africa’s largest economy is experiencing a severe dollar shortage that has forced many to turn to alternatives, notably Bitcoin (BTC).

Since this is nothing new The economic crisis that Nigeria is facing has troubled its population for years. From the African country where Bitcoin has become an escape valve.

Data confirms this, as 35% of the Nigerian population between the ages of 18 and 60 owned cryptocurrencies or exchanged them during the first half of 2022, as reported by CryptoNoticias last week. .

Some analysts currently predict That Naira will gradually recover. However, Ralph Mupita, CEO of MTN Group, Africa’s largest telecommunications operator, said today The Naira will remain volatile after devaluing by 96.7% by December last year.

What happened to Naira in Nigeria, This is a model of what happens when the state fails its citizens., This has been suggested by macroeconomic analyst Lynn Alden, who referred to the case of this African country as an example of how fiat is now broken money that affects the lives of people living in the world.

“There are over 160 currencies in the world, and each of them has a centralized ledger. Many of them quickly lose value; “This is the most recent example, affecting more than 200 million people.”

Lynn Alden, macroeconomic analyst on the case Of Nigeria.

Nigeria is recording high volumes of P2P Bitcoin trading after access to the cryptocurrency platform was blocked. Source: linaldon/x.

The Naira has devalued, but who is to blame?

The devaluation of the naira was caused by several factors, including the decline in oil prices, the country’s main source of income, corruption and state economic mismanagement. Additionally, lack of economic diversification and political and social instability were also part of the contributing factors. devaluation of naira,

However, the Nigerian government recently Has held Bitcoin industry actors responsible and other cryptocurrencies, arguing that they are negatively impacting the country’s economy through platforms that manipulate exchange rates.

Last month, an adviser to Nigeria’s president called for Binance, KuCoin, and other bitcoin and cryptocurrency trading exchanges to be banned in the country.

Bio Onanuga, Information and Strategy Adviser to President Bola Tinubu, X came to claim it These companies manipulate the Naira, contributing to the currency’s decline Nigerians in the foreign exchange market.

Meanwhile, the Nigerian government has been tightening regulations on cryptocurrency exchanges in recent months. It even took a full-scale crackdown on non-payment of taxes by unregistered brokerage houses.

In the search for those responsible for the devaluation of the Naira, the Nigerian government also asked Binance to provide names. Transaction Details of Top 100 Cryptocurrency Users In Nigeria. This happened in mid-March, when Nadim Anjawala and Tigran Gambaria, key figures in Binance’s African operations, were arrested.

The officers were detained without charge in an action that is still not fully explained. Meanwhile, the case of Nigeria and the devaluation of the Naira continues to look What can happen anywhere in the world when the state fails.

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