The liquidity crunch recently worsened in Nigeria as banking services struggle to match the fast swell of users who rely on their platform, causing crypto merchants to suffer.
The Central Bank of Nigeria (CBN), embarked on implementing the naira redesign this year. Since the beginning of this exercise, the process has snowballed into a series of painful experiences for citizens.
Firstly, to kick start the swap, the apex bank moped all old notes from circulation and announced a deadline for changing them. Meanwhile, there was an inadequate inflow of new notes, which led to a scarcity of physical cash. The poor liquidity forced more people to rely on cashless banking for daily transactions. The Nigerian crypto market was not exempt from this development as more bitcoin traders resorted to cryptocurrencies to move monies.
Slow Transactions Frustrate Crypto Merchants
This shift in transaction platform choice was significant. Coindailypress previously reported that Bitcoin traded at a premium on a Nigerian exchange due to this influx. The situation has worsened as online banking services struggle to meet up with the sudden surge of users who rely on their platform.
Source: Binace P2P Market
Merchants on Binance’s P2P market were among the worst-hit groups in the crypto sphere as they suffered delayed transactions- and losses in worse cases. Some traders explicitly declared their refusal to transact with users of some commercial banks on their terms and conditions section. The banking difficulties in Nigeria may force more citizens to rely more on digital currencies if the situation worsens. This character is consistent with Nigerians, as they have had to rely on cryptocurrencies to survive difficult economic conditions.
Do you see cryptocurrencies providing a cushioning effect for Nigerians amidst this liquidity crisis? Let us know your thoughts in the comment section below.
