Effect of Cryptocurrencies on the Value of the Nigerian Naira

Effect of Cryptocurrencies on the Value of the Nigerian Naira

1.1 Background To The Study

Cryptocurrency constitute as a subset of alternative currencies or better referred to as digital currency is a digital asset from block chain technology which is designed to function as a medium of exchange using cryptography to execute transactions and to control the creation of additional units of the currency. The evolution and advancement of economic revolution and the need to sustain the economy through advanced financial technology, through a new form of digital currency using encryption techniques to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank,precipated the introduction of cryptocurrency into the Nigerian economy. Consequently a digital currency is beginning to gain wide information and acceptance; and one of the most famous is bit coin. Other digital currencies include Swiss coin and one coin.bit coin, Swiss coin and one coin are cryptocurrencies or digital currencies created and controlled using cryptography.

Currently countries such as Brazil, Canada, Uk, Germany, south Korea, India have introduced Automated Teller Machines (ATM) for cryptocurrency so as facilitate banking technology. In Nigeria the patronage and acceptance of digital currencies is gaining wide popularity. The owners do not require the central bank; nor any physical bank. Once you are a subscriber, you only know yourselves and they give you a bit of the bitcoin which can be converted to cash and used for payment in some countries. Currently bitcoin is considered the best among all other crypto-currency, the bitcoin is adjudged the pacesetter. Mining is another type of cryptocurrency. Mining is a way of getting these coins and putting them up for sale all digitally. Also the Billion Coin (TBC) is another type of cryptocurrency newly introduced with an opening price of 0.001 and has since increased in value. The Trading on cryptocurrencies such as TBC, Bitcoin, SwissCoin, Edinar Coin and other digital currencies, happens peer to peer. The research therefore seeks to investigate the effect of cryptocurrencies on the value of the Nigerian naira.

1.2 Statement of the Problem

Cryptocurrency constitute as a subset of alternative currencies or better referred to as digital currency is a digital asset from block chain technology which is designed to function as a medium of exchange using cryptography to execute transactions and to control the creation of additional units of the currency. The evolution and advancement of economic revolution and the need to sustain the economy through advanced financial technology, through a new form of digital currency using encryption techniques to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank,precipated the introduction of crypto-currency into the Nigerian economy. Consequently a digital currency is beginning to gain wide information and acceptance; and one of the most famous is bit coin. Other digital currencies include Swiss coin and one coin.bit coin, Swiss coin and one coin are cryptocurrencies or digital currencies created and controlled using cryptography.

The entry of cryptocurrency into the Nigerian financial sector is gaining wide popularity but with fears and doubt about its functionality in since there is no regulatory framework from the apex bank. But there is wide call for CBN to commence appropriate regulatory action. However it is pertinent to note that it is the CBN’s monetary policy restrictions on foreign exchange, that have led Nigerians to innovate the use of bit coin to access foreign exchange. Therefore the eradication of the currency would be viewed as irrational and unworthy of a country which seeks to promote domestic industry and innovation. Consequently it may be found appreciable if the join several other countries of the world to approve its operation in Nigeria. Therefore the problem confronting this research is to determine the effect of cryptocurrency on the value of the Nigerian naira.

1.3 Objectives of the Study

To determine the effect cryptocurrencies on the value of the Nigerian Naira.

1.4 Research Questions

1. What is a cryptocurrency?

2. What are the effect cryptocurrencies on the value of the Nigerian Naira?

1.5 Significance of the Study

The increasing wave of crptocurrency into the economy with its attendant effect propels a study of this nature to facilitate better understanding of this new concept.

And to determine its effect on the value of Nigerian money.

The study shall also serve as a veritable source of information.

1.6 Research Hypothesis

Ho: The Effect of crptocurrency on the value of the Nigerian naira is low.

Hi: The Effect of crptocurrency on the value of the Nigerian naira is high.

1.7 Scope of the Study

The study focuses on the appraisal of Effect of crptocurrency on the value of the Nigerian naira.

1.8 Limitations of the Study

The research was confronted by some constraint such geographical factor and logistic.

1.9 Definition of Terms

CRYPTOCURRENCY DEFINED

Cryptocurrency constitute as a subset of alternative currencies or better referred to as digital currency is a digital asset from block chain technology which is designed to function as a medium of exchange using cryptography to execute transactions and to control the creation of additional units of the currency. The evolution and advancement of economic revolution and the need to sustain the economy through advanced financial technology, through a new form of digital currency using encryption techniques to regulate the generation of units of a currency and verify the transfer of funds operating independently of a central bank,precipated the introduction of crypto-currency into the Nigerian economy. Consequently a digital currency is beginning to gain wide information and acceptance.

REFERENCES

Ayo Alonge (2017) NDIC, CBN consider cryptocurrency

Bitcoin Composite Quote (XBT)” (2014). CNN Money. CNN

Nermin Hajdarbegovic (7 October 2014). “Bitcoin Foundation to Standardise Bitcoin Symbol and Code Next Year”. CoinDesk.

Romain Dillet (9 August 2013). “Bitcoin Ticker Available On Bloomberg Terminal for Employees”. TechCrunch.

Siluk, Shirley (2 June 2013). “June 2 “M Day” promotes millibitcoin as unit of choice”. CoinDesk.