Cryptocurrency, it’s is described as a subset of alternative currencies or better referred to as digital record keeping device that uses balances to keep track of trading obligation, which is publicly know to all traders. It’s also designed to function as a medium of exchange using Cryptography to execute transactions and to control the creation of additional units of the currency. Some countries such as Brazil, Canada, UK, Germany, South Korea, India have introduced Automated Teller Machine (ATM) for cryptocurrency to facilitate banking technology. Some of the forms of cryptocurrencies includes, Ethereum, Bitcoin, e.t.c.
In Nigeria the patronage and acceptance of digital currencies is gaining weight and wide popularity. The owners do not require the central bank; nor any physical bank. The creation of cryptocurrency as a cybernetic currency has been generating reactions in the global economy, such as countries like Nigeria. There as been countless advantages and disadvantages discourse on cryptocurrencies importance on the Nigeria economy. However, the Nigerian government through is governing agencies such as the Central Bank of Nigeria and securities and exchange commission has tried to place a ban on Cryptocurrency. However it legal status remains unclear, unlike in countries like Morocco and Algeria where there is an explicit prohibition on trading in Bitcoins such that a breach attracts hefty fines.
EFFECT OF CRYPTOCURRENCY ON MONETARY POLICY IN NIGERIA.
Economy with an underdeveloped financial market, the activity of cryptocurrency maybe challenging to regulate and, as such, may provide the platform for investors, both individual and corporate bodies to evade tax thereby resulting in a low-income generation for government relative to the level of activities in the market which could affect the budgetary plans of the government.
However, in an economy with a highly developed financial market, the suitable management of cryptocurrency might result in an increase in revenue generation through a tax which would enhance the budgetary plans of the government. Moreover, Cryptocurrency operate alongside official currencies. The current volume are small and do not challenge the position of official money as the main currency. But as Algorithms improve to limit the volatility of cryptocurrencies, there popularity and use tend to increase. This would lead to coexistence with other official currencies. In specific, privately-issued currencies would be used if the official currencies do not ensure price stability, but would lose their value as a medium of exchange when the central bank credibly guarantees the real value of money balances. Nonetheless, from a practical view-point, central banks could face certain risks from the advent of cryptocurrencies as relevant medium of exchange with stable purchasing power due to their high volatility level.
BENEFIT OF CRYPTOCURRENCY IN NIGERIA.
A 2020 survey indicates that 32% of Nigerians participate in buying and trading cryptocurrency. In 2021 survey indicates that it went higher to 61%. Nigeria accounted for $400 million worth of cryptocurrency transactions, ranking it third globally in trading volume. Cryptocurrency in Nigeria has so far positively enriched the lives of impoverished citizens. For example, a friend of mine who introduced me to the world of cryptocurrency, told me how cryptocurrency lifted him out of poverty. Initially struggling to survive on minimum wage, and odd jobs, He now earns enough money from cryptocurrency trading to build his own house and purchase a farm. It’s really a struggle for a common man with good educational foundation and background to survive on ends meet, let alone enjoy any luxuries in Nigeria, but since the introduction of cryptocurrency it as been a bit better. The upsurge in cryptocurrency transactions has had a profound effect on many Nigerians seeking a way out of poverty. Nigerians are capitalizing on the educational opportunities and supplemental income cryptocurrency brings. The unexpected benefits of cryptocurrency in Nigeria bring hope to citizens living in poverty.
In Conclusion: Several suggestions have emerged from research concerning the government's response to legislating cryptocurrency ranging from the creation of state-owned cryptocurrency to banning, the danger of most of these recommendations would be future strive for dominance and superiority among nations resulting from divergent views and approaches toward its legislation. Considering this fact, the cost of ignoring the usability of cryptocurrency outweighs the perceived risks of not legislating it in the future, especially in developing countries like Nigeria. Nevertheless, numerous financial regulatory authorities issued casual warnings to the general public, advising of the risks of involvement in digital currencies; however, digital currencies are flourishing since the number of businesses and persons who accept them as payment are increasing every day. Therefore, it could be concluded that a significant number of people are now fully persuaded that the digital currency is genuine and has value. Though, digital currencies may be attractive to cybercriminals and present a host of new challenges to law enforcement in Nigeria, their approval as a national development tool in the digital age should be generally encouraged.