Nigerians Switch to Crypto as Country’s Currency Weakens

As Nigerians trade more dollar-dominated digital assets, they have been hedging against a drop in value for the naira, which is seeing new lows on the country’s black market.

Nigeria is the biggest and most populated economy on the continent, Voice of America reported Monday (Aug. 1). According to experts, investing in crypto has been helping with the devaluation of the naira.

Per data from a P2P finance platform cited in the report, Nigerians reportedly traded over $5 million in bitcoin, a 250% increase within the period under review.

The trade volumes have been increasing since the beginning of the year and have hit roughly $400 million as of June. Igwe Chrisent, founder of online trading platform Truzact, said that his platform has also seen a greater amount of trading.

“We’ve seen a surge in the USD savings we have in our vault,” Chrisent said, per the report. “Nobody wants to have a million naira worth $2,000 today and then tomorrow, your 1 million naira is now worth $1,500. So, everybody is basically trying to hedge against the dollar. No matter how bad the naira falls, their money is not affected. That’s the only thing making people come to crypto.”

It all comes as the naira has seen a steady decline for months now, having lost over 30% of its value in the past year. Matters are worsening because of other local factors, including shortages of food and energy and the ongoing impact of the Russia-Ukraine war.

African countries have been upping their work in crypto and digital payments recently, and PYMNTS recently wrote that the Central African Republic has begun selling its Sango Coin cryptocurrency, with the expectation that it would be worth $21 million.

Read more: Central African Republic Set to Start Crypto Sales

However, crypto is currently going through a rout, and critics have been skeptical that Sango Coin could do very well in a war-torn country without much connectivity. The Central African Republic was also the first country in Africa to make bitcoin an official currency.

For all PYMNTS EMEA coverage, subscribe to the daily EMEA Newsletter.