Digital currency refers to any form of currency that exists only in a digital form and is not physically tangible, such as paper currency or coins. It is also commonly known as cryptocurrency, which is a type of digital currency that uses cryptography to secure transactions and to control the creation of new units of currency. Some well-known digital currencies include Bitcoin, Ethereum, Litecoin, and Ripple. Digital currency offers several advantages over traditional currencies, such as faster and cheaper transactions, greater security, and greater privacy. However, it also has its challenges, including volatility, lack of acceptance, and regulatory issues. Overall, digital currency is an evolving technology that has the potential to revolutionize the way we transact and store value.
In Nigeria, the use of digital currencies is low compared to other developing countries that have full support of crypto currency. Some of the reasons why the use of digital currencies in Nigeria is still low are lack of awareness, fear of scam e.t.c.
Outlined below are some of the major reasons Reasons why the use of digital currency is still low in Nigeria;
1. Lack of awareness: One of the primary reasons why the use of digital currency is still low in Nigeria is a lack of awareness of what digital currency is and how it works. Many Nigerians do not fully understand the potential of digital currencies and the benefits they offer, such as faster and cheaper transactions. This lack of awareness makes it difficult for them to adopt this new technology.
2. Fear of scams: The Nigerian population is also wary of digital currencies because of the prevalence of scams associated with them. Many people fear fraudulent activities that have plagued the digital currency sector in the past. A lot of Nigerians have been victims of Ponzi schemes like MMM, which dented the trust in digital currencies.
3. Low trust in digital currencies: Another reason for the slow adoption of digital currencies in Nigeria is the low level of trust. Many Nigerians are not confident in the security and reliability of digital currencies. Given the complexity of the technology that powers digital currencies, it is often challenging to explain to a layman, which makes it harder to trust.
4. Lack of regulations: The regulatory framework for digital currencies in Nigeria is still largely undefined, leading to uncertainty on issues like the legality of digital currencies, taxation on gains, etc. This lack of clarity further lowers the adoption rate of digital currencies as people don't want to engage in activities that could be seen as illegal.
5. Infrastructure issues: Nigeria has a poor digital infrastructure, which hinders the widespread adoption and use of digital currencies. Poor internet connectivity, inadequate technological equipment, and limited access to digital services make it difficult for people to access and use digital currencies.
6. Cultural differences: Nigeria is a country with diverse cultural beliefs and practices. As digital currencies are a relatively new concept, some people may be hesitant to adopt them due to their culture and beliefs. The digital divide is also significant in Nigeria as several people are not tech-savvy.
7. Limited acceptance: Another factor that limits the use of digital currencies in Nigeria is the limited number of merchants and businesses that accept digital currencies as payment methods. This means that users of digital currencies have limited places to spend them, which reduces the incentive to use them.
8. High volatility and limited utility: Finally, many Nigerians view digital currencies as being too risky due to their strong volatility, rapid fluctuation and the lack of a real use case for them. This perception further lowers the adoption of digital currencies in Nigeria.
In conclusion, the low adoption rate of digital currencies in Nigeria can be attributed to a combination of factors, including lack of awareness, limited acceptance, inadequate infrastructure, fear of fraud, low trust, volatility and regulatory challenges. Overcoming these obstacles will be critical in encouraging wider adoption of digital currencies in Nigeria.