Many Nigerians are hedging against collapsing local currency by amassing dollar-denominated digital assets, in particular stablecoins and bitcoins, thereby causing the naira to plunge to a record low in the black market.
According to recent data, Nigerians traded over $5 million worth of Bitcoin on the popular P2P trading website Paxful, and LocalBitcoins saw a 258% increase from last week’s data.
Many Nigerians nonetheless exchange the digital currency in the peer-to-peer market where transactions are priced in dollars, despite the fact that banks are forbidden by the central bank from aiding cryptocurrency transactions.
In addition, information gathered from foreign exchange dealers in various areas of Lagos, the country’s commercial centre, revealed that the Naira was exchanged for the dollar on Wednesday at a rate above N710 to the dollar, while the hard currency was purchased from holders at a rate between N695 and N700 to the dollar.
