As Nigeria's central bank continues to push its citizens towards the use of digital cash, inflation has soared well above market levels.
This has caused Bitcoin to be currently selling for 17.8 million Naira, or $38,792, on Nigerian crypto exchange NairaEX.
There is a 60% premium over the current market price of Bitcoin, which is approximately $23,700 at the time of writing.
In an effort to accelerate the shift to a cashless society, the Central Bank of Nigeria continues to limit ATM withdrawals.
Following an announcement made in December, the central bank imposed a limit on cash withdrawals earlier this month.
From Jan. 9, citizens were only permitted to withdraw 20,000 NGN (roughly $43.50) per day from cash machines (ATMs).
It also occurred just days before new Naira banknotes went into circulation with the aim of curbing inflation and money laundering. Nigerians have been given until January 24 to exchange their old higher denomination bank notes for the new currency issued by the central bank.
However, people complained that there was not enough time to meet the deadline. According to reports on January 29, the central bank has extended the deadline to February 10.
Nigeria is not the first country to experience a surge in Bitcoin premiums. A ban was imposed by the central bank in February 2021 on regulated financial institutions from providing services to cryptocurrency exchanges in the country. At the time, this caused the BTC premium to rise as high as 36%.
Google Trends reports that Nigeria has become the country with the most bitcoin web searches since the recent interest in Bitcoin began.
Furthermore, The Central Bank of Nigeria has also launched a domestic credit card scheme to compete with foreign credit cards such as MasterCards and Visas, according to Reuters on Jan. 26.
Designed to reduce foreign card fees and exchange costs, the "AfriGo" card scheme provides Nigerians better access to bank cards.
