Why Bitcoin? Nigeria faces violent protests amid cash crunch
The restrictions on cash withdrawals imposed by the Central Bank of Nigeria (CBN) have made a strong case for Bitcoin as a solid store of value and a censorship-resistant currency.
Nigeria is currently facing a shortage of physical cash after the CBN redesigned its notes, rendering the old notes of the local naira currency useless. The policy prompted citizens to flood banks and ATMs to exchange their old bills for new ones.
Nigeria limits cash withdrawals
With the redesign came a weekly cash withdrawal limit of 500,000 naira (around $1,087) for individuals and 5,000,000 naira (around $10,087) for organizations from January 9. Despite the restrictions, Nigerians still find it difficult to get their hands on the new notes as most banks and ATMs do not have the cash to dispense.
To make matters worse, Point of Sale (POS) transactions and fees, according to a report from The Guardian, has skyrocketed. Nigerians are forced to pay 2,000 to 3,000 naira ($4.3 to $6.5) for every 10,000 naira ($22) cash withdrawal via POS.
Riots in Nigeria due to lack of money
The CBN maintains that the policy aims to push Nigeria, which remains heavily dependent on cash, into a digital cash economy, increase the adoption of CBDCe-Naira, while reducing the spread of fake cash in the country.
However, the move appears to have flopped, leaving countless citizens injured and a few dead in its wake.
The lack of money has disrupted businesses and led to violent protests across the country. According to The Guardian, angry protesters have stormed the streets, attacking bank offices and ATMs while blocking roads leading to the banks.
Bitcoin fix this?
One of the many attractive features of Bitcoin is that it is resistant to censorship. This means that it is not linked to a central authority, making it impossible for any government to control it.
Adopting Bitcoin in Nigeria will give citizens 24/7 instant access to their money at affordable rates. Since the transactions are peer-to-peer and decentralized, they cannot be stopped.
In addition, Bitcoin also aims to solve the problem of inflation. With the naira shortage, inflation rates in Nigeria are also sky high, currently at over 21% in the last month alone. Bitcoin’s status as a store of value and hedge against inflation can protect its owners from the impact of rising inflation in Nigeria.
The upside of holding BTC amid the current situation in Nigeria is becoming more apparent as demand for the digital asset reaches new heights. Bitcoin Premium in Nigeria recently increased by 60% at $38,000 per BTC.
