Central Bank of Nigeria

Bitcoin premium hits 60% in Nigeria as it limits ATM cash withdrawals

The price of one Bitcoin (BTC) in Nigeria can cost upwards of $38,000.

The price of Bitcoin (BTC) in Nigeria has skyrocketed to well above market levels amid continued efforts by the central bank to push its citizens into digitalized cash.

At the time of writing, the price of 1 BTC on Nigerian crypto exchange NairaEX is currently 17.8 million Naira, equating to a whopping $38,792.

This represents more than a 60% premium over the current market price of Bitcoin, which is around $23,700 at the time of writing.

It comes as the Central Bank of Nigeria has continued to impose limits on ATM cash withdrawals amid an ongoing effort to accelerate its shift to a cashless society.

Earlier this month, the central bank imposed a limit on cash withdrawals following a December announcement.

As of Jan. 9, citizens were only allowed to withdraw a maximum of 20,000 NGN (around $43.50) from cash machines (ATMs) per day with a limit of 100,000 NGN (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, people suffered long queues amid complaints that there was insufficient time to meet the deadline. The central bank has now extended that deadline to Feb. 10 according to reports 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. This drove the BTC premium as high as 36% at the time.

Related: Nigeria set to pass bill recognizing Bitcoin and cryptocurrencies

The recent interest in Bitcoin has also seen Nigeria becoming the leading country for Bitcoin web searches, according to Google Trends.

Additionally, on Jan. 26 Reuters reported that the Central Bank of Nigeria launched a domestic card scheme to rival foreign cards like MasterCard and Visa.

The “AfriGo” card scheme was designed to give Nigerians better access to bank card services and circumvent often expensive foreign card fees and exchange costs.

Bitcoin premium hits 60% in Nigeria as country limits ATM cash withdrawals

The price of one Bitcoin (BTC) in Nigeria has skyrocketed to the equivalent of $38,000 in the local currency, the naira.

The price of Bitcoin (BTC) in Nigeria has skyrocketed to well above global market levels amid continued efforts by the central bank to push its citizens into digitalized cash.

At the time of writing, the price of 1 BTC on the Nigerian crypto exchange NairaEX is 17.8 million nairas, equating to a whopping $38,792.

This is more than a 60% premium over the current market price of Bitcoin, around $23,700 at the time of writing.

It comes as the Central Bank of Nigeria has continued to impose limits on ATM cash withdrawals amid an ongoing effort to accelerate its shift to a cashless society.

Earlier this month, the central bank imposed a limit on cash withdrawals following a December announcement.

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%.

Related: Nigeria set to pass bill recognizing Bitcoin and cryptocurrencies

The recent interest in Bitcoin has also seen Nigeria becoming the leading country for Bitcoin web searches, according to Google Trends.

Additionally, on Jan. 26 Reuters reported that the Central Bank of Nigeria launched a domestic card scheme to rival foreign cards like Mastercard and Visa.

The “AfriGo” card scheme was designed to give Nigerians better access to bank card services and circumvent often expensive foreign card fees and exchange costs.

Nigeria set to pass bill recognizing Bitcoin and cryptocurrencies

The slated law comes as Nigeria’s eNaira has only managed to obtain a 0.5% adoption rate, a little more than a year after its launch in October 2021.

The Nigerian government will reportedly soon pass a law that will recognize the usage of Bitcoin (BTC) and other cryptocurrencies as a means to keep up to date with “global practices.”

The news was reported by Nigerian-based masthead Punch Newspapers on Dec. 18 following an interview with House of Representatives Committee on Capital Markets Chairman Babangida Ibrahim.

The report stated that if the Investments and Securities Act 2007 (Amendment) Bill is signed into law it would allow the local Securities and Exchange Commission to “recognize cryptocurrency and other digital funds as capital for investment.”

Ibrahim stressed the need for Nigeria to keep up to date with trends and developments in capital markets:

“Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date [with] global practices.”

The report comes almost 24 months after Nigeria banned crypto activity in February 2021, with the Central Bank of Nigeria (CBN) ordering Nigerian crypto exchanges and service providers to cease activity and mandating banks to shutter the accounts of any individuals or entities found to be engaging in trading activities.

But Ibrahim — who served as Nigeria’s president between 1985 and 1993 — insists that the passing of the law isn’t a 180-degree turn on the ban but rather a secondary review of what is within the scope of the CBN’s powers:

“It is not about [the] lifting of the ban, we are looking at the legality: what is legal and what is within the framework of our operations in Nigeria.”

“When cryptocurrency was initially banned in Nigeria, the CBN discovered that most of these investors don’t even use local accounts. So, they are not within the jurisdiction of the CBN. Because they are not using local accounts, there is no way the CBN can check them,” he explained.

If the law passes, amendments will be made to Nigeria’s Investments and Securities Act 2007.

In addition to the assignment of legal recognition to Bitcoin and other cryptocurrencies, the law will outline the regulatory roles of the Central Bank of Nigeria and Nigeria’s Securities Exchange Commission (SEC) on matters relating to digital currencies, the report said.

The law also comes as Nigerians have also shown little to no interest in Nigeria’s central bank digital currency, the eNaira, which had only obtained a 0.5% adoption rate in October, 12 months after its launch.

Related: Emerging markets lead global adoption index: Chainalysis report

The Nigerian government’s efforts to crack down on crypto activity earlier on were arguably ineffective too, as adoption continued to increase following the ban in February 2021.

From January to August last year, Nigerians only trailed the United States in Bitcoin trading volume, and over the same period, Nigerians were more likely google“Bitcoin” than citizens of any other country.

Nigerian residents were also found to be the most crypto-curious nation, according to an April research study conducted by CoinGecko. The curiosity comes as no surprise, as Nigerians continue to look to fight off rampant inflation and economic malaise.

Nigeria also recently entered into early-stage discussions with cryptocurrency exchange Binance in September to develop a crypto-friendly economic zone that will aim to support crypto and blockchain-related businesses in the region.