Why Bitcoin? Nigeria Faces Cash Crisis and Violent Protests
• Nigeria is facing a cash shortage after the Central Bank of Nigeria (CBN) redesigned its banknotes, which has led to violent protests.
• The CBN imposed weekly cash withdrawal limits and citizens are having difficulty accessing the new notes from banks and ATMs.
• Point of Sale transactions and fees have skyrocketed, prompting the CBN to push for a digital-cash economy with its CBDC, e-Naira.
Cash Shortage in Nigeria
The cash shortage in Nigeria has led to violent protests, leaving countless citizens injured and a few dead. The Central Bank of Nigeria (CBN) recently redesigned its banknotes, causing the old bills of the local naira currency to become useless. This policy prompted citizens to flood banks and ATMs to swap their old bills for new ones.
Cash Withdrawal Restrictions
The CBN imposed weekly cash withdrawal limits of 500,000 naira for individuals (around $1,087) and 5,000,000 naira (around $10,087) for organizations as of January 9th. Despite these restrictions, Nigerians still find it difficult to lay their hands on the new notes as most banks and ATMs do not have enough cash to dispense. Additionally, Point of Sale transactions and fees have skyrocketed with some customers paying 2,000 to 3,000 naira ($4.3 to $6.5) for every 10,000 naira ($22) withdrawn via POS.
Riots Over Cash Scarcity
The riots in Nigeria over this cash scarcity have been met by resistance from the government who claim that this policy aims to push Nigeria into a digital-cash economy withits own Central Bank Digital Currency (CBDC), e-Naira – reducing counterfeit money while also boosting adoption of its own currency system. However these claims have not been enough to quell public outrage over access issues related to withdrawing physical cash from banking institutions in their country.
Bitcoin As A Solution?
With no clear resolution in sight many Nigerians are now turning towards Bitcoin as an alternative store of value as well as a censorship-resistant currency that cannot be regulated or confiscated by any central authority figure or institution like traditional central banks can do with fiat currencies such as the Naira in this case. By using Bitcoin instead Nigerians are able gain full control over their funds without fear from any third party interference or manipulation .
It remains unclear how soon this situation will be resolved but what is certain is that cryptocurrencies such as Bitcoin offer an attractive solution for those seeking financial freedom outside traditional banking systems or regulation constraints – making it possible for anyone across borders access money anytime anywhere without being subjected oppressive policies or inflationary risks associated with fiat currencies like Naira .