Analysis of cryptocurrency as legal tender in Nigeria

Abstract

This article examines the prospect of cryptocurrency as legal tender in Nigeria. After the 2008 financial crisis, there was the need for a currency that was more secured, transparent and decentralised. This led to the emergence of cryptocurrencies. However, Bitcoin is the first established cryptocurrency. While the main argument surrounding cryptocurrency is whether it should be regulated or not and the extent to which it can be regulated, the crux of this article is how cryptocurrency can be made legal tender in Nigeria. The reason for this article’s line of analysis is not farfetched. 11% of Nigerian internet users own one cryptocurrency or the other. Nigeria is leading in the number of persons between the ages of 18 and 24 using cryptocurrency in the world. The article argues that cryptocurrency is attractive to the younger generation and as such should be made a legal tender in Nigeria. The article also observed that controversial monetary policies in Nigeria which erode peoples’ savings also make people to see investment in cryptocurrencies as an opportunity to circumvent controversial monetary policies. Thus, the article concludes that cryptocurrency has come to stay in Nigeria irrespective of the seemingly Government’s opposition to it. However, the article suggests a hybrid of both fiat currency and cryptocurrency. It argues that this hybrid approach will give people the liberty to use the type of currency that best suits their purpose.