Nigeria to Pay 1.2 Cents for Each Dollar Remitted to the Country to Combat Cryptocurrency Use

The Central Bank of Nigeria (CBN) has announced a scheme that seeks to boost international remittances as well as to encourage the use of official corridors when retrieving funds. The CBN’s move to incentivise recipients follows the plummeting of the country’s official remittances inflows as recipients opt for non-traditional corridors such as cryptocurrencies.

Declining Remittances

Under the CBN’s so-called “naira for dollar scheme,†recipients of international remittances will be entitled to an extra payment equivalent to 1.2 cents (5 naira) for every one U.S. dollar received. However, according to the CBN, this incentive scheme is set to run for just 60 days.

Nigeria to Pay 1.2 Cents for Each Dollar Remitted to the Country to Combat Cryptocurrency Use

In announcing these new measures, the CBN says its objective is to “increase the inflows of diaspora remittances into the country.†In a letter that explains how the incentive system works, the central bank said:

According to the letter, the incentive scheme is set to end on May 8 and officials are confident this will boost the inflow of remittances into the country via the banking ecosystem.

Plunging Incoming Remittances

As previously reported by news.Bitcoin.com, Nigeria’s international remittances inflows plunged towards the end of the year 2020. As the data from Nairalytics shows, the country’s inflows dropped from the January 2020 high of $2.05 billion to $54.4 million by end of September 2020.

Overvalued Exchange Rate

The massive drop in remittances via official corridors comes as more Nigerians switched to companies that use cryptocurrencies when moving funds across borders. Unlike regulated financial institutions that use the “official exchange rate,†the increasingly popular crypto remittance companies reportedly (before the imposition of the directive) used the parallel exchange rate when converting USD to naira. As the gap between the official and parallel exchange rate increased, inflows via official channels declined while the volumes handled by crypto companies surged.

Meanwhile, in its past attempts to halt the decline in the inflows of foreign exchange, the CBN devalued the naira currency three times. The first devaluation was announced in March of 2020 when the dollar to naira exchange rate moved from 1:307 to 1:360. Four months later, the rate was marginally adjusted to USD1 for 380 nairas. In its last devaluation, the CBN moved the exchange rate to USD1 for 411 nairas. However, according to Abokifx, a website that tracks the parallel market exchange rate, one U.S. dollar was trading for 475 nairas at the time of writing. It remains to be seen if the incentive scheme is going to succeed in returning remittance inflows to past levels.

What are your thoughts on CBN’s incentive scheme? Tell us your views in the comments section below.

Du lịch nhật bản, hướng dẫn du lịch Nhật và đánh giá địa điểm Nhật Bản Japan travel news, japan travel guides, japan holiday destinations and japan reviews

RELATED NEWS

Concordium Debuts its Business-Oriented Blockchain Mainnet

After years of development, Concordium has unveiled its permissionless blockchain and MVP that is designed to meet the needs of enterprises by delivering transparency and governance, all with an orientation towards protecting user privacy. Identity-Centric Network to Promote Broader Business Adoption Although blockchain’s novel characteristics are not in dispute, corporate adoption of distributed ledger technology […]

Xem chi tiết: Concordium Debuts its Business-Oriented Blockchain Mainnet

Doge in Brooklyn: A Local Apparel Store Starts Accepting the Famed Crypto

On the heels of the SpaceX announcement that the company accepted dogecoin as payment, an apparel store on Brooklyn’s colorful Flatbush Avenue took the jump as well into the deep, cold Doge waters. Brick-and-Mortar Is Another Brick in the Crypto Adoption Wall Crypto adoption has been widely and thoroughly discussed in the media and on […]

Xem chi tiết: Doge in Brooklyn: A Local Apparel Store Starts Accepting the Famed Crypto

Iran’s President Wants Crypto ‘Laws and Instructions’ Implemented as Soon as Possible

Iranian president Hassan Rouhani discussed cryptocurrencies at the most recent meeting of the government’s Economic Coordination Board and told participants that regulatory policy is needed to protect consumers. Rouhani believes the Iranian government should “communicate the necessary laws and instructions†as soon as possible so dishonorable crypto businesses are avoided. Regulation Necessary to Keep ‘Unprofessional’ […]

Xem chi tiết: Iran’s President Wants Crypto ‘Laws and Instructions’ Implemented as Soon as Possible

South African Court Submissions Expose Lies and Deceptive Tactics Used to Perpetuate MTI Bitcoin Ponzi Scheme

New submissions by a South African regulator, the Financial Sector Conduct Authority (FSCA) and liquidators have exposed the web of lies and deceptive tactics that were used by Mirror Trading International (MTI) CEO Johann Steynberg and others to perpetuate the Ponzi scheme. Undeclared Losses In its report filed with the South African court, the regulator […]

Xem chi tiết: South African Court Submissions Expose Lies and Deceptive Tactics Used to Perpetuate MTI Bitcoin Ponzi Scheme

Denmark to Revise Tax Law to Target Cryptocurrencies

The Danish tax ministry is reportedly mulling over revising the country’s tax law to deal with the challenges posed by cryptocurrencies. Denmark’s tax authority is concerned about the rising risk of fraud and widespread filing errors involving cryptocurrencies. Denmark to Revamp Tax Law to Deal With Cryptocurrency Denmark is considering revamping its tax code in […]

Xem chi tiết: Denmark to Revise Tax Law to Target Cryptocurrencies

Report: Document Shows Specific Bitcoin Miners in Xinjiang Instructed to Shut Down

An official notice stemming from the Changji prefecture government in Xinjiang details that officials from the Zhundong Economic-Technological Development Park must instruct bitcoin miners to shut down. China’s province of Xinjiang is a highly concentrated region of bitcoin miners and bitcoin activities at the park must cease by June 9, according to the document. Nevertheless, […]

Xem chi tiết: Report: Document Shows Specific Bitcoin Miners in Xinjiang Instructed to Shut Down

$160 Billion Asset Manager Entering Crypto Market in Collaboration With Nasdaq

An asset management firm with nearly $160 billion in assets under management, Victory Capital, has announced that it is entering the cryptocurrency market. The firm has established exclusive agreements with Nasdaq and asset manager Hashdex. Asset Management Firm Entering Crypto Market Victory Capital Holdings Inc. (Nasdaq: VCTR) unveiled its plans to enter the cryptocurrency market […]

Xem chi tiết: $160 Billion Asset Manager Entering Crypto Market in Collaboration With Nasdaq

Coinbase Says Interest From Pension Funds and Hedge Funds Has Skyrocketed, Institutional Holdings Soar 170%

The Nasdaq-listed cryptocurrency exchange Coinbase has revealed record growth in its institutional business. “This year, interest from pension funds and hedge funds has skyrocketed, supported by the roll-out of crypto-ETPs as well as an increased understanding of the crypto economy,†said Coinbase. Coinbase Sees Interest From Institutional Investors Skyrocketing Cryptocurrency exchange Coinbase (Nasdaq: COIN) reportedly […]

Xem chi tiết: Coinbase Says Interest From Pension Funds and Hedge Funds Has Skyrocketed, Institutional Holdings Soar 170%

Hong Kong to Connect Digital Yuan With Domestic Payments System in Cross-Border Trials

Mystery Whale Returns by Moving $35 Million — Miner Transfers 1,000 ‘Sleeping Bitcoins’ from 2010

The First DeFi & NFT Social Media Project, Torum Announces NFT Launchpad

Uganda Museum Collaborates With Software Development Firm to Create NFTs for Display on Binance Marketplace

Warren Buffett’s Berkshire Hathaway Invests in Bitcoin-Friendly Digital Bank

Commodity Strategist Mike McGlone Says $40K BTC Target ‘More Likely’ Than $20K

Crypto Payments App Bottlepay Is Now Available Across Europe

Elon Musk Agrees With Vitalik Buterin on Dogecoin and Ethereum Collaboration