Nigerian Government will Submit to Bitcoin Rule
Bitcoin is sapping the Nigerian Government of its power, forcing it to negotiate with its citizens
A fantastic article by The Guardian has highlighted the power of Bitcoin to limit government influence and oppression. The worlds political leaders need to take note.
In summary the Nigerian government has been throwing its weight around by brutalising it’s citizens during the “EndSars” protest, freezing the accounts of anybody they don’t like (Feminist Coalition, Crypto holders, journalists etc), all of which has led its citizens to taking precautions against the state.
According to a poll in March 2021, 32% of Nigerian responders used or owned cryptocurrencies. This is attributed to the following:
Reliance on remittance payments
The high charge of sending money overseas using traditional banking system
The rise of peer-to-peer phone payments courtesy of everyone having a smart phone, even if they don’t have a bank account
By freezing is citizens bank accounts, the Nigerian government had hoped to shut down dissenting voices and was horrfied to discover how easily its citizens circumvented its sanctions using crypto. By freezing assets within the mainstream banking sector the government has accelerated the uptake of Crypto as its citizens buy Crypto with overseas bank accounts and engage in more peer to peer transactions using their mobiles which are well outside of the governments’ power to stop or regulate.
As a result of the governments heavy handedness a lot of companies have also taken to holding crypto in case their bank accounts are frozen, allowing them to continue operating.
How did we get here?
In 2020 the Central Bank of Nigeria devalued its currency (the Naira) by 24%. Debasement is likely to be higher than 10% for 2021. All this was done while prices rose with food inflation climbing higher than it has in over a decade. With losses like this it is of little surprise the population is seeking alternative solutions to surviving.
With trust in the Naira at record lows Nigerians have been forced to find ways to mitigate that risk. The US dollar would traditionally have been the currency of choice but transporting those into the country involves crossing borders or using the the traditional banking industry. Bitcoin circumvents all these barriers.
Another Central Bank Digital Currency (CBDC)
The Nigerian government (like everywhere else) has announced its intention to build its own CBDC to combat the success of Crypto and hopefully wrestle back some control. We wrote an article on CBDC’s here.
At The Wealth Gap we don’t hold much faith in all these CBDC’s being created and expect the majority will go the same way as so many crypto shitcoins did in 2018.
What Else Can The Nigerian Government Do?
They have failed to ban crypto currencies and they will fail to regulate it. Bitcoin can’t be regulated. The Nigerian government is learning this the hard way (as will most other governments) and eventually they will have no choice but to do the right thing and negotiate with its citizens. In the mean time the propaganda war against bitcoin will continue.
A Glimpse into the Future?
The Wealth Gap View: Financial mismanagement by politicians across the world have historically led to people moving their wealth to gold or the US Dollar. Gold is unfortunately hard to transport and expensive to store in meaningful amounts while the US dollar is controlled and debased by the US government, Bitcoin is the new option. Now that anyone with a smart phone (almost everyone) can buy/sell Bitcoin, Governments globally will be punished for their financial mismanagement by their own citizens opting out of their own failing systems. Governments will have no choice but to do better or become irrelevant. 😎
Till next time
The Wealth Gap