Nigeria is a country dealing with a lot of financial problems for some time now. Money transfers, such as remittance solutions, have always made life a bit more bearable for the people living there. But that is going to change, as the Central Bank of Nigeria will block most money transfers in and out of the country. This is a golden opportunity for Bitcoin to make a splash, as it can’t be blocked by the Central Bank.
A Very Weird Scheme By The Central Bank of Nigeria
It does not make sense for the central bank to block money transfers going in and out of Nigeria right now. While the institution issued a warning this week to all money transfer companies, it is not clear what the bank’s long-term plan is. We do know three companies have retained their licenses, whereas all others have been revoked earlier today.
To be more precise, the central bank seems to have two primary concerns right now. First of all, there is a growing number of unlicensed money transmitters in the country. Secondly, the bank also wants to prevent any attempt to undermine the country’s foreign exchange regime. Capital outflows would hurt the greater economic good of the country.
As was to be expected, this drastic decision was not received warmly at all. Nigeria remittance transfers add up to US20bn annually, and taking away this market could spell disaster for the local economy. One of the companies seeing its license revoked is WorldRemit, who feel these rules are draconian.
The only three remaining licensed companies are Western Union, MoneyGram, and Ria. All of these companies have established a physical presence in the country, while some of the others are only available online. Then again, this could also be a power grab by the central bank to only favor companies willing to share customer details with them.
At the same time, this is an exciting opportunity for Bitcoin remittance in Nigeria. Since cryptocurrency operates outside of the control of the central bank, there is no way to prevent people from using it. Moreover, users can become their own agents who convert between Bitcoin and fiat currency, which would create a whole new market for the African country.
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