Given the convenience of established currency and payment systems, what is driving the ever-growing interest in Bitcoin and other virtual currencies?
Different reasons are driving the interest in Bitcoin, depending on the stakeholder. Many stakeholders are engaged in speculation, becoming rich by mining Bitcoin or accepting it as a form of payment. Bitcoin is also interesting because a new set of technologies is being built to enable it to function (eg, to enable Bitcoin mining and Bitcoin ATMs). These technologies will lead the way for new advances in payment techniques. Technology and financial companies have seen the potential of Bitcoin and are becoming involved.
Another issue driving interest in Bitcoin is the fact that it is decentralised. The US Treasury classifies it as a “convertible decentralised virtual currency”. Bitcoin gives users anonymity, as no personal details are involved and it cannot be traced.
Has your jurisdiction taken steps to regulate virtual currencies? What is their current status?
At present, the Central Bank of Nigeria does not regulate virtual currencies. It remains to be seen what concrete steps the bank will take to regulate Bitcoin and other virtual currencies in future. Perhaps. after its work to stabilise the naira during the ongoing oil price slump is complete (for further details please see “Implications of record drop in value of naira“), it may focus attention on Bitcoin and other virtual currencies. The bank is committed to achieving a cashless economy.
However, Bitcoin is bought and sold in Nigeria freely. For example, Nigerian retailer Minku, which makes leather goods, accepts Bitcoin as payment on its website.
The use of Bitcoin is becoming increasingly popular in Nigeria. Its users include forex traders, online investors, importers, exporters and betting sites. At present, 1 bitcoin is worth N47,126.
There are a number of merchants in Nigeria where Bitcoin can be bought and