Reports said that the price of Bitcoin has skyrocketed to well above global market levels, but only if the official naira-to-US dollar rate is used for calculation.
It has been reported that as of January 30, the price of 1 BTC on the Nigerian crypto exchange NairaEX is 17.8 million nairas, equating to a whopping $38,792 in the official rate.
However, local media points out that the official foreign currency rate listed by the Central Bank of Nigeria (CBN) doesn't reflect the actual USD price available to Nigerian citizens. CBN shows that $1 equals N460 on January 30. The exchange rate of USD in the parallel market, or the actual price that Nigerian citizens can make transactions in US dollars, is close to N750.
The report said that the disparity between the official naira-to-USD rate and the actual market value of USD for Nigerian traders causes a 60% "premium" over the current market price of Bitcoin, around $23,700. Recently, CBN introduced new naira banknotes with the aim of curbing inflation and money laundering. The central bank imposed a deadline of January 24 for Nigerians to exchange their old, higher denomination bank notes for the new currency.
Likewise, there were long queues and complaints that there was insufficient time to meet the deadline. The central bank has now extended that deadline to February 10, the BBC reported on January 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%.
The recent interest in Bitcoin has also seen Nigeria becoming the leading country for Bitcoin web searches, according to Google Trends. Additionally, on January 26, Reuters reported that the Central Bank of Nigeria launched a domestic card scheme to rival foreign cards like Mastercard and Visa.
Thus, 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.