CHAPTER ONE
INTRODUCTION
1.1 Background to The Study
Crypto currency 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 bit coin, Swiss coin and one coin are crypto currencies 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 crypto currency 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 crypto currency newly introduced with an opening price of 0.001 and has since increased in value. The Trading on crypto currencies such as TBC, Bitcoin, SwissCoin, Edinar Coin and other digital currencies, happens peer to peer. The research therefore seeks to investigate the effect of crypto currencies on the value of the Nigerian naira.
1.2 Statement of the Problem
Crypto currency 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 crypto currencies or digital currencies created and controlled using cryptography.
The entry of crypto currency 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 crypto currency on the value of the Nigerian naira.
1.3 Objectives of the Study
The general aim of this study is examine the effect of cryptocurrencies on the value of the Nigerian Naira. Specifically, the study wil;
1. Ascertain if cryptocurrencies greases Nigeria economy by offering greater liquidity.
2. Determine if cryptocurrencies serves as a sufficient liquid fiat alternative for Naira holders.
3. Find out if cryptocurrencies can serve as a control variable to currency value of Nigeria.
4. Determine if the growth of Naira depends only in oil sector.
5. Ascertain if the efficiency of monetary policy does have a significant effect on Nigeria Naira.
6. Identify whether cryptocurrency have a significant impact on the value of Nigeria Naira.
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