- The Bitcoin premium has reached 63% in Nigeria.
- Restrictions on cash withdrawals paired with a push towards a cashless economy have led to an increase in demand for BTC.
The Central Bank of Nigeria’s recent efforts to push its citizens towards a cashless society has led to a sharp increase in the price of Bitcoin in the country.
The shift to a digitized economy paired with the ongoing restrictions on ATM withdrawals has prompted people to resort to the flagship cryptocurrency in order to facilitate daily transactions.
Bitcoin premium ranges between 60%-120%
The increase in demand for Bitcoin has sent its price soaring. The price of one Bitcoin (BTC) on the Nigerian crypto exchange NairaEX is currently 17.8 million Naira, which equates to $38,673.
This represents a 63% premium against the market price of BTC at $23,603. Meanwhile, the exchange rate among peer-to-peer traders on LocalBitcoins has reached a whopping $62,000, marking a significant premium of 162%.
The central bank issued a notice restricting cash withdrawals last month. The maximum cash withdrawal over the counter (OTC) per week was capped at 100,000 NGN for individuals and 500,000 NGN for corporations.
As for ATM withdrawals, citizens are allowed to withdraw a maximum of 20,000 ($43.4) NGN every day with a weekly cap of 100,000 ($217) NGN.
These restrictions came into effect earlier this month on 9 January, just before the circulation of new Naira banknotes, aimed at combating inflation and money laundering.
Citizens initially had until 24 January to exchange their old banknotes for new ones, but the deadline has been pushed to 10 February.
This is not the first time the Bitcoin premium has surged in Nigeria. In February 2021, the central bank prohibited regulated financial institutions from providing services to cryptocurrency exchanges. This decision led to a 36% increase in BTC premium at the time.
Earlier this month, the Nigerian Central Bank published a report outlining the regulatory framework for stablecoins and initial coin offerings (ICO) in the country.
However, most of the content pertained to eNaira, Nigeria’s central bank digital currency (CBDC)
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