Can Bitcoin Solve Naira's Problem?: Crypto Experts Believes It

It is no news that Nigeria's financial system is heavily broken, and a ho for recovery is not in sight. This has raised a lot of questions as Africa's biggest economy is currently in shambles. Banking system services are below poor and there is an outcry for a total rebranding of banking in Nigeria.

Facts to Note:

1. Do you know you know getting cash in Nigeria is expensive as banks don't have the cash to give you right now
2. Do you know you cannot transfer money to other neighboring African countries without meeting bureaucratic challenges
3. Do you know a lot of businesses are crashing in Nigeria because of a lack of cash to run them?

February 5th was a popular date in the Nigerian crypto market, it was the day the Central Bank of Nigeria (CBN) issued an order barring banks to stop enabling all forms of crypto transactions. 

As far as the majority of the country's population was concerned, it was a hash move on the sector that was already prospected to be an avenue to reduce the unemployment rate in the country and increase cashless transactions over time.

The CBN stated that the reason behind the order was to checkmate money laundering and forced sponsors of terrorism to desist from the trade. Its effectiveness is still in question today.

Recently Africa played host to the inaugural bitcoin conference held in Accra Ghana, Jack Dorsey the former Twitter CEO and Current CEO of Block a crypto-enabled payment platform stated that bitcoin is the strongest alternative to the crippled financial system.

A lot of fintech in Nigeria are already providing alternative payment services to the failing banking system, the common ones are Opay, Palmpay, Kuda, and many others. But the problem persists.

What are the challenges of Bitcoin In Nigeria?

Aside from the obvious government policies, bitcoin is still not a familiar name among the non-learned community in Nigeria, and they are the major players in the local market system.

Another is the unstable price of the coin, as its volatility cannot be overemphasized. The current price of 1 bitcoin to Naira is over N12 million naira which can soar or decline unpredictably in no time.

The third and crucial concern is the lack of physical structures for bitcoin, non-learned Nigerians who use banks trust it because of the physical presence of banks, they believe knowing exactly who houses their money gives them a sense of assurance and security.

Finally, the perceived complexity of it, makes the system seem complicated to explain to non-techie people, and there is no a way to explain the complete extent of the workings of crypto without mentioning cryptocurrencies terminologies like blockchain, fiat currency, digital wallet 

Can the Problems be Solved?

Mike Brock, CEO of TBD at Block, told CNBC that "it doesn't matter if the prices go up or down because I can still use bitcoin as a vehicle to move money globally instantaneously"

Introducing the recently invented custodian lightening network, called "Machankura" meaning Money by the South African developer Kgothatso Ngako, The system was designed to work offline with the aid of Unstructured Supplementary Service Data (USSD) which is already in use in the Nigerian banking system.

The system can work without an internet connection hence bringing bitcoin and crypto closer to the non-learned part of the country.

On the issue of its complexity Bernard Parah the CEO of Bitnob, a cryptocurrency fintech company based in Nigeria stated that the issue is not about what is bitcoin but can problems be solved. He also noted that they are settling into the Nigerian Banking system where people will see the transactions locally without having any direct contact with bitcoin.

As Africa continued to grow into the cryptosystem, the solution it stands to provide may be the savior the African crumbling financial system needs.

It waits to be seen whether Nigeria, which is at the forefront of tech in Africa will adopt the system to give crypto enthusiasts and stakeholders in the country a sense of inclusion and hope for a stronger financial system.