The use of cryptocurrency to make cross border remittances is cheap. Nigeria tech-inclined in the diaspora have started using cryptocurrencies to send money income to invest or support their families.
The flow of remittance coming into Nigeria has been reduced by a good 27 per cent from $23.5 billion last year to $17.2 billion. The reduction was $4 billion more than the prediction of the world bank.
The world financial institution has predicted that the foreign remittances coming into Nigeria were going plummet by $2 billion stemming from the effect of covid 19 especially in countries where funds are generated from.
Consequently, the usage of cryptocurrencies by Nigerians have surged over time even though the government frowns at its usage.
Profitable Than Crude Oil
Remittances from Diaspora are huge in Nigeria. In the year 2015, Nigeria collected more foreign remittance inflow compared to what was earned from crude oil, the biggest revenue-generating medium of the Nigerian economy.
Oil characterised over 50 per cent of government revenue during the past five years and constitute 80 per cent of Nigeria’s foreign exchange earnings. In 2015, Nigerians abroad remitted $21.3 billion home while the country made $19.6 billion from crude oil throughout that year.
“Diaspora remittances inflow is the second-largest source of foreign exchange earnings for Nigeria”
Peter Moses, a Nigerian based in the UK, who is also a finance and investment expert, believes that the move to cryptocurrency may be responsible for the decline in diaspora remittances for 2020.
“As at last year, Nigeria was already ranking third globally, after the United States and Russia, of the countries with the highest cryptocurrency reading volumes”
He added that “as rational economics agents, opting for cryptocurrency for this purpose would only be natural as it solves all these problems and other better banking experiences.”
Lastly “it is in the apex bank’s interest to play by the rules of the unorthodox game it is about to enter”
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