By the look of things, trouble is brewing in parts of Africa, as the Central bank of Nigeria has issued an order to ban the usage of credit and debit cards abroad. According to one of the affected commercial banks in Nigeria, this is just a temporary measure, although the real reason behind the decision is still pretty vague at the moment. Will this create another opportunity for Bitcoin?
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Falling Naira To Blame For Central Bank of Nigeria Decision?
Even though the ban will go into effect come January 1st, the consequences are far broader than just physical transactions. For those Nigerians looking to buy goods and services online from foreign online retailers, card payments will not be possible either. Any type of card transaction that is not conducted between two Nigerian parties will automatically be refused.
This harsh decision made by the Central Bank of Nigeria is raising a lot of questions regarding the country’s financial situation. Ever since oil prices started tumbling down, the Nigerian Naira has been losing a lot of its value. Oil export is the main export for Africa’s largest economy, and despite financial efforts to prop up the currency, there is no improvement in sight anytime soon.
Similar to most African countries, Nigeria has its “wealthy class” – a very small percentage of the population – and a lot of people barely making ends meet. Among the affected people will be the wealthy class, as they travel abroad on a regular basis and use their plastic cards to complete purchases while shopping.
At the time of publication, only one bank has taken the effort to inform its customers regarding the order issued by the Central Bank of Nigeria. Standard Chartered sent an email detailing how plastic cards will no longer be enabled for international use come January 1, 2016. The bank then mentions how this is a result of the “limited foreign exchange supply in the financial market”.
It is not the first time such rash decisions are made by the Central Bank of Nigeria. Back in June of 2015, businesses were prohibited from accessing hard currency to import 40 “blacklisted’ items. Among these items are plastic, soap, and private jets. With the Nigerian Naira continuing to lose its value, moving funds out of the country will become all but impossible.
A Big Opportunity For Bitcoin
It goes without saying this financial turmoil in Nigeria is creating a huge opportunity for Bitcoin adoption to thrive in the country. Unlike plastic cards and fiat currency, Bitcoin is not regulated or controlled by central banks, and can still be used as a way to move foreign funds in and out of Nigeria within mere seconds.
Situations like these are a prime example as to why the financial ecosystem needs to be disrupted on a global scale. Bitcoin is in a prime position to do exactly that, as the digital currency is available to people all over the world. Plus, cross-border transfers of value are subject to lower fees compared to traditional means.
What are your thoughts on the decision by the Central Bank of Nigeria to halt international card usage? Will the Naira continue to fall? Let us know in the comments below!
Images courtesy of Shutterstock, Central Bank of Nigeria, Flagpedia