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It seems from this article that the Nigerian government tried to implement currency controls to prevent capital flight because their currency (NGN) was under pr
by seanhunter 3y ago
It seems from this article that the Nigerian government tried to implement currency controls to prevent capital flight because their currency (NGN) was under pressure given a very high inflation rate, so a sizeable chunk of people took to buying stablecoins so they would have an asset that was not depreciating, giving Nigeria a very high penetration of crypto (second only to India globally).
Because the government had put in place currency controls, the real exchange rate was artificially high (because there was in effect a throttle on NGN supply in the official FX market) but the stablecoin rate reflected a market clearing price based on the real supply which was therefore much lower. Rather than fixing the fundamental problem (the causes of inflation) the government has decided to arrest a couple of poor employees of Binance.
It's easy to hate on crypto and goodness knows I'm no fan of Binance, but it's really hard to see either crypto or Binance as to blame here.
- pcthrowaway 3y ago> second only to India globally Do you have a source for this? I thought Argentina and other extremely high inflation countries had much higher crypto penetration. Also, isn't crypto pretty much banned in India?
- cantSpellSober 3y agoChainalysis' "2023 Global Crypto Adoption Index" lists Nigeria as second to India overall https://www.chainalysis.com/blog/2023-global-crypto-adoption-index/#top20 https://www.chainalysis.com/blog/2023-global-crypto-adoption...
- imtringued 3y agoThe average population doesn't care about a solution to inflation. They will vote for quick hacks like price ceilings, which are especially popular in the form of rent control. Also, whenever there is inflation, the average voter blames the most prominent politician currently in charge as if he was centrally planning the economy. The current situation is an indirect expression of what voters believe about inflation. An inflation free currency would require paying for liquidity and god forbid paying for services you personally benefit from. That would be socialism, right?