As the Nigerian Naira continues on an endless nose dive, financial institutions are in a frenzy sourcing for a solution to the persistent decline of the Naira. Various policies have been implemented by the Central Bank of Nigeria, Ministry of Finance, Commercial banks, and other stakeholders to put a temporary or permanent stop to this crisis.

As of the time of writing this article, the price of the Naira to a dollar in the parallel market is at an all-time low of 1740 naira to 1 dollar. At this point, it seems most Nigerians have given up as there is no flicker of hope in sight.In a supposed move to increase the amount of dollars in circulation within the largely dollarized economy, and meet up with the forex demand from their customers, commercial banks have reportedly been trying to convince and incentivise their customers to convert the dollar in their domiciliary account to naira.

The banks are using several strategies to reach out to their customers, which include sending emails and SMS to customers with dollar accounts, encouraging them to convert to Naira at a competitive rate. This move is a strategy by the banks to make up for the dollar dearth that the nation is experiencing and also satisfy their customer demands.Meanwhile, the Nigerian government and the Central Bank of Nigeria have responded to reports suggesting plans by the government to convert funds in domiciliary accounts to naira.

Over $30 billion is reported to be sitting idle in accounts across Nigerian banks, including Access, GTB, UBA, Zenith, and others. Experts believe that this move would help the naira recover in the forex market and boost the forex supply in Nigeria. The question remains; how effective is this approach?

At the heart of this dilemma, the nagging question in the minds of many is; “when will this end?” “Is there a lasting solution?”

Stablecoins and crypto: A long-awaited remedy

Over the years, people who saved their money in traditional fiat currencies have been disappointed due to the consistently rising inflation and currency devaluation.Imagine working hard all day to have enough to save for the rainy day, only to watch your savings diminish and disappear as a result of inflation and persistent rise in the price of commodities.

Almost everyone has had a taste of this sour soup. As the price of commodities increases in the market, the value of your money gradually reduces, resulting in a reduction in purchasing power. This is an inevitable inverse relationship.

To solve this problem, financial experts have considered many solutions but none have been able to provide a lasting panacea. However, with the introduction of cryptocurrencies and stablecoins, there seems to be a glimmer of hope.

Financial experts propose that these digital assets could serve as an effective hedge against inflation. How can stable coins and cryptocurrency help to provide an effective hedge against inflation?


Limited supply: A key advantage

Limited supply is an important concept in economics and plays a crucial role in the value proposition of cryptocurrencies like Bitcoin. For example, Bitcoin has a maximum supply cap of 21 million coins. This means that once 21 million Bitcoins have been mined, no more can ever be created.

This is in direct contrast with fiat currencies that can be continuously printed at the discretion of the central bank. This limited supply of cryptocurrencies creates scarcity which then increases demand as people would prefer to invest in an asset that has the potential to increase in value.

This is a simple economic concept, the lower the supply the higher the price or value of the commodity. Holding assets with finite supply like cryptocurrencies can help preserve the purchasing power of Nigerians against the various economic factors that are responsible for the devaluation of the currency.

Since the supply of these cryptocurrencies is limited, their value may increase as demand rises, making it a potentially potent tool for offsetting the effects of currency devaluation.

The stable coin alternative

Many people have lost their enthusiasm for storing their wealth in cryptocurrency due to the high volatility associated with this form of digital currency. For risk-averse investors, cryptocurrency is always approached with cold feet. This is where stablecoins come in.

Stablecoins are digital currencies whose value is associated with another class of asset to ensure the stability of their value. The most prevalent type of stablecoins are those pegged to other assets, such as the US dollar, ensuring price stability.

Imagine that amidst the current naira crunch, your money was saved in a USD-backed stablecoin like USDT or USDC, you would definitely be smiling right now. Stablecoins offer a safe haven against the Naira’s depreciation.

Charting the path forward

As we wait and hope for a change in the current economic challenge posed by the declining Naira, embracing cryptocurrencies and stablecoins could provide a viable solution.

While awaiting broader economic reforms, leveraging these digital assets can help safeguard your hard-earned Naira against depreciation and provide a pathway to financial stability.

Source: https://www.on-chain-media.io/article/naira-devaluation-it-is-time-for-nigerians-to-embrace-stablecoins-and-cryptocurrency

These coin people and their wahala again

What are you people trading sef, pi this pi that. This is the only π I know.

All of you are codedly doing yahoo

EreluRoz:
These coin people and their wahala again

What are you people trading sef, pi this pi that. This is the only π I know.

All of you are codedly doing yahoo

You are a very stupid idiot. Do you even know what you are talking about? If crypto is as criminal as you think, do you think a serious country like the UK will tap into it?

EreluRoz:
These coin people and their wahala again

What are you people trading sef, pi this pi that. This is the only π I know.

All of you are codedly doing yahoo

You are a very stupid idiot. Do you even know what you are talking about? If crypto is as criminal as you think, do you think a serious country like the UK will tap into it?

https://www.on-chain-media.io/article/uk-to-introduce-new-rules-on-crypto-staking-and-stablecoins-in-six-months

jhubril:


You are a very stupid idiot. Do you even know what you are talking about? If crypto is as criminal as you think, do you think a serious country like the UK will tap into it?

Why are you this triggered if your hands are clean? Can you swear that you don't do shady things?

Rubbish.....embrace farming.

EreluRoz:
Why are you this triggered if your hands are clean? Can you swear that you don't do shady things?

You are just a clueless idiot. I won't spend another minute reading your crap. When you have a brain inside your skull, I will educate you on cryptocurrency.

jhubril:


You are just a clueless idiot. I won't spend another minute reading your crap. When you have a brain inside your skull, I will educate you on cryptocurrency.

If you are sure your hands are clean then go ahead and educate me or you just want to stylishly run away from the truth

EreluRoz:
If you are sure your hands are clean then go ahead and educate me or you just want to stylishly run away from the truth

What is it with you Nigerians and attacking people and things you have no clue about? People own crypto just the way you can earn and keep money in the bank. The difference is that with crypto you are your own bank and can choose to do anything with it. Does money become automatically corrupt without it being
used for wrong purposes? People use crypto for illicit purposes just the way money is used to carry out illegal activities.

Crypto is a unit of a digital money backed up by a cryptographic system. It is not issued by a government or a central bank and it exists because people recognize and use it for online transactions. Today, money is undergoing a significant transformation. In the age of advanced technology and blockchain, what you call money will soon become a relic of the past.

jhubril:


What is it with you Nigerians and attacking people and things you have no clue about? People own crypto just the way you can earn and keep money in the bank. The difference is that with crypto you are your own bank and can choose to do anything with it. Does money become automatically corrupt without it being
used for wrong purposes? People use crypto for illicit purposes just the way money is used to carry out illegal activities.

Crypto is a unit of a digital money backed up by a cryptographic system. It is not issued by a government or a central bank and it exists because people recognize and use it for online transactions. Today, money is undergoing a significant transformation. In the age of advanced technology and blockchain, what you call money will soon become a relic of the past.

Well the rate at which people use it to defraud others is alarming which is why some people still don't believe in it

EreluRoz:
Well the rate at which people use it to defraud others is alarming which is why some people still don't believe in it

Some people? Well, I can slightly agree with you. But you will be shocked to know that crypto crime rate has dropped significantly and advanced countries are developing laws to back crypto investments. You should ask yourself why a country like the UK is prioritizing a crypto legislation. Is Nigeria more developed than the UK? The problem with Nigeria's policy making is that it is led by clueless and daft members of the old brigade. When you live in a country where old men die in power, what do you expect? A sound economic policy ?

Epstein:
Rubbish.....embrace farming.

You will cry hot tears in the future when you realize what you did to yourself.

https://www.on-chain-media.io/article/uk-to-introduce-new-rules-on-crypto-staking-and-stablecoins-in-six-months

jhubril:


https://on-chain-media.io/article/safeguarding-your-digital-assets-against-crypto-scams

Thanks 🙏