Crypto is causing fiat to lose value?

[Stompix]

NGNUSD chart shows that over the past decade, NGN has lost 90% of its value compared to USD. I don't think this is a result of the emergence of crypto in Nigeria. In NGN's devaluation scandal, crypto is innocent!

Hihi, not really, it can also act like an intermediary for this, much like gold has in the past!
For example somebody wants to buy Bitcoin with Nairas, but since Bitcoin is valued in dollars and it is not something that you produce locally, much like gold in most of the times you buy it from somebody who is not really wanting your currencies and it changes it immediately into another, basically exacerbating the demand for $ and increasing the offer for Naira's also.
So for every $million of crypto purchases there will be one million of $ needed and the equivalent of $1million nairas on the market but with different demand, which would devalue the naira, then with he next batch more naira's less $ to trade for and so on and on and on!
Much like how the Argentinian peso is devaluating as people buy $!

Of course the scale at which happens when compared to the other ways the naira is dragged down by failing exports and costly imports is just below the level of margin error but if every citizen would decide tomorrow to buy bitcoin wish all it's wage, then yeah, it will be like an instant collapse.

[DrBeer]

Unfortunately or fortunately - but cryptocurrencies don't have much of an impact on the fiat system. And there's a lot of reasons why.
If they are considered as intangible investment assets, then their entry and exit to the market is through fiat.
If we consider it as a means of payment, it has no influence on the fiat world at all, as it is a single case.
The only thing that cryptocurrencies affect in the fiat world is the work of services connecting the crypto and fiat worlds. There are more regulatory laws for them.
Unfortunately, the current financial and economic model of the world economy does not envision the use of monetary surrogates such as cryptocurrencies.

[0t3p0t]

Nope crypto isn't causing fiat devaluation. The value of fiat is losing due to various reasons and one of which is the corrupt politicians who hold leadership positions in a country.

Another cause for devolution of a currency is overprinting of it, which's a main concern when it comes to a currency's value.

When current account of a country gets in deficit that also causes inflation and loss of value of that country's fiat currency.

I'm not sure why Nigeria's currency is losing its value but I'm very sure it's not losing its value because of crypto-currencies.

The highlighted phrase is for me the most common reason why there is devaluation in country's currency. And yeah cryptocurrency does not cause devaluation in a local currency unless majority of people are abandoning it in favor of crypto but do we really think government will allow that to happen? Of course no because they are in control of everything.

[Jamal Aezaz]

First thing is that if fiat is printing in a large number without any restrictions then it will gradually loss its value and other thing is that due to inflation fiat currency is losing money but still it is used widely and one cannot ignore its uses.

Cryptocurrency has its own place and success but if cannot devalue fiat because in our daily life we cannot use Crypto but we are using fiat. People are finding new ways of earning so crypto is in their way so that's why they are accepting crypto for earning but they are also using fiat for daily expenses.

[Agbe]

In my country it is not bitcoin or cryptocurrency that causes the devaluation of the fiat currency but the dollar. In the last ten years, the dollar was exchanged with the fiat as the rate 150 but now we are exchanging $1 to 1,500  and because of that everything is very high in price. Poor people are crying every day because high cost of living. But people are saying that it is because of the printing quantity of the fiat currency that is causing the inflation and I also reason with them.

[Stompix]

In my country it is not bitcoin or cryptocurrency that causes the devaluation of the fiat currency but the dollar. In the last ten years, the dollar was exchanged with the fiat as the rate 150 but now we are exchanging $1 to 1,500  and because of that everything is very high in price. Poor people are crying every day because high cost of living. But people are saying that it is because of the printing quantity of the fiat currency that is causing the inflation and I also reason with them.

It's not only money printing and least not in case of Nigeria!
Money printing doesn't automatically trigger inflation, Japan is the obvious example where a decade of money printing didn't manage to bring inflation over 2%, you can print 1000 trillions if the people don't spend it you will have a flat big zero inflation!

What you're experiencing now in Nigeria is the result of years of overvaluation of you currency, you had a good run while oil was high, then revenue started to plummet, you forced a fixed rate which had no real backing against the USD and you spend all your reserves to try to keep that fixer rate going, then implemented two rates, official and less official but enforced (that was nafex) , and then when obviously those failed also, you got what is happening now, which is the true value of the naira!

Oh, you know something, let's call it ironic at least?
Every time a nigerian tries to escape inflation and buys $ for its naira it's digging the pit deeper for the others!

[Gideon99]

Crypto-currency is being accepted in many places as a form of payment to replace fiat, so sometimes crypto is considered by governments as a risk that affects the right to regulate the national economy. However, I never thought that someone could say that crypto is the cause of fiat's devaluation. At least until Nigeria's Presidential Adviser shared his views.

The adviser argues that cryptocurrency exchange platforms are exacerbating the devaluation of the naira, Nigeria's national currency. He also criticizes Binance, a leading cryptocurrency exchange, for setting exchange rates that undermine the Central Bank of Nigeria's (CBN) authority. The Nigerian government is wary of the volatile nature of cryptocurrencies and the risks they pose to economic stability. Consequently, the government is considering a comprehensive ban on crypto platforms to protect the naira and ensure fiscal discipline.

"Through a series of statements on his X account, Onanuga has called for decisive action against cryptocurrency exchange platforms, accusing them of exacerbating the devaluation of the naira, Nigeria's national currency^[1]."

I am not surprised by the series of news related to the war between the Nigerian government and Crypto:

• Feb 2021: The Central Bank of Nigeria bars banks and financial institutions from dealing in or facilitating transactions in crypto assets, embezzling money laundering and terrorism financing risks^[2].
• Dec 2023: Nigeria's central bank has lifted a ban on transacting in cryptocurrencies, while saying global trends had shown a need to regulate such activities^[3].
• Jan 2024: Nigeria's central bank released has inaugural guidelines for banks opening cryptocurrency accounts, while retaining its ban on them holding or trading in virtual assets on their own behalf^[4].

But it seems Nigeria's Presidential Adviser is confusing Reason and Result: The Reason was Nigeria's economic downturn, which led to the devaluation of fiat, Resulting in people choosing to accumulate crypto to protect their assets. The Presidential Adviser may have its own opinion, but NGNUSD data does not lie.

NGNUSD chart shows that over the past decade, NGN has lost 90% of its value compared to USD. I don't think this is a result of the emergence of crypto in Nigeria. In NGN's devaluation scandal, crypto is innocent!

I count this intentional confusion as intentional deception to cause misunderstanding among people with little understanding of the crypto market. For those holding crypto, these lies will have no impact whatsoever, they understand that crypto is helping them protect their assets and avoid the risks of fiat's crazy devaluation.

What do you think about this Presidential Adviser's slander against crypto? Will this become a new behavior that other governments can learn to crack down on crypto?
[1] Nigeria's Battle with Crypto: Presidential Adviser Calls for Crackdown on Exchange Platforms
[2] Nigeria's banks barred from cryptocurrency transactions -central bank
[3] Nigerian central bank lifts ban on crypto trading
[4] Nigeria slaps strict rules on banks after lifting crypto ban

This ideal that crypto is competing with fiat currency and causing them to lose value. Crypto is a global decentralized, highly liquid asset that easy to transfer and exchange. That's why many people choose it rather than traditional fiat Currencies. Crypto is not causing any damages to the value of Fiat currency, it's just that the total market cap of all cryptocurrency is still tiny fraction of the global economy. What do you think about this?

[Sim_card]

OP, why are you listening to the lies that your country government is saying. Instead of blaming their incompetency on the high level of inflation, and hardship in the country, they are putting it on cryptocurrency. How is this possible? Does crypto have legs, hands and has an office, that it is causing the depreciation of Naira. I don't know why Nigeria government is so corrupt that they cannot even think of what they are saying to the public. Nigeria is more of a consuming nation than producing nation, so why wouldn't your currency depreciate, when most commodities are imported. What about bad government, what is the negative impact of a bad government.

[MrSpasybo]

OP, why are you listening to the lies that your country government is saying. Instead of blaming their incompetency on the high level of inflation, and hardship in the country, they are putting it on cryptocurrency. How is this possible? Does crypto have legs, hands and has an office, that it is causing the depreciation of Naira. I don't know why Nigeria government is so corrupt that they cannot even think of what they are saying to the public. Nigeria is more of a consuming nation than producing nation, so why wouldn't your currency depreciate, when most commodities are imported. What about bad government, what is the negative impact of a bad government.

I'm not in Nigeria, I'm just referring to a statement by the Nigerian presidential advisor. This event can help us see more clearly the problems in the economy, weak governance and its consequences on the value of fiat. Crypto should be seen as the solution, not the cause, to these problems.

I believe that no one who understands economics will believe these blaming statements 

[electronicash]

OP, why are you listening to the lies that your country government is saying. Instead of blaming their incompetency on the high level of inflation, and hardship in the country, they are putting it on cryptocurrency. How is this possible? Does crypto have legs, hands and has an office, that it is causing the depreciation of Naira. I don't know why Nigeria government is so corrupt that they cannot even think of what they are saying to the public. Nigeria is more of a consuming nation than producing nation, so why wouldn't your currency depreciate, when most commodities are imported. What about bad government, what is the negative impact of a bad government.

I'm not in Nigeria, I'm just referring to a statement by the Nigerian presidential advisor. This event can help us see more clearly the problems in the economy, weak governance and its consequences on the value of fiat. Crypto should be seen as the solution, not the cause, to these problems.

I believe that no one who understands economics will believe these blaming statements 

it is however meant for the people who don't understand how money works. as long as the people initially believes its crypto that made the purchasing power dwindles, they've done their job.

the recent news i heard was that the Nigerian government is going to be adopting USD just like the Latin countries using USD.
i still think they are not safe with it. USD is also losing its value since the US government is also printing lots of notes. this is destroying the global economy since the USD is the base currency. all the currency is base on USD price.

[philipma1957]

Crypto-currency is being accepted in many places as a form of payment to replace fiat, so sometimes crypto is considered by governments as a risk that affects the right to regulate the national economy. However, I never thought that someone could say that crypto is the cause of fiat's devaluation. At least until Nigeria's Presidential Adviser shared his views.

The adviser argues that cryptocurrency exchange platforms are exacerbating the devaluation of the naira, Nigeria's national currency. He also criticizes Binance, a leading cryptocurrency exchange, for setting exchange rates that undermine the Central Bank of Nigeria's (CBN) authority. The Nigerian government is wary of the volatile nature of cryptocurrencies and the risks they pose to economic stability. Consequently, the government is considering a comprehensive ban on crypto platforms to protect the naira and ensure fiscal discipline.

"Through a series of statements on his X account, Onanuga has called for decisive action against cryptocurrency exchange platforms, accusing them of exacerbating the devaluation of the naira, Nigeria's national currency^[1]."

I am not surprised by the series of news related to the war between the Nigerian government and Crypto:

• Feb 2021: The Central Bank of Nigeria bars banks and financial institutions from dealing in or facilitating transactions in crypto assets, embezzling money laundering and terrorism financing risks^[2].
• Dec 2023: Nigeria's central bank has lifted a ban on transacting in cryptocurrencies, while saying global trends had shown a need to regulate such activities^[3].
• Jan 2024: Nigeria's central bank released has inaugural guidelines for banks opening cryptocurrency accounts, while retaining its ban on them holding or trading in virtual assets on their own behalf^[4].

But it seems Nigeria's Presidential Adviser is confusing Reason and Result: The Reason was Nigeria's economic downturn, which led to the devaluation of fiat, Resulting in people choosing to accumulate crypto to protect their assets. The Presidential Adviser may have its own opinion, but NGNUSD data does not lie.

NGNUSD chart shows that over the past decade, NGN has lost 90% of its value compared to USD. I don't think this is a result of the emergence of crypto in Nigeria. In NGN's devaluation scandal, crypto is innocent!

I count this intentional confusion as intentional deception to cause misunderstanding among people with little understanding of the crypto market. For those holding crypto, these lies will have no impact whatsoever, they understand that crypto is helping them protect their assets and avoid the risks of fiat's crazy devaluation.

What do you think about this Presidential Adviser's slander against crypto? Will this become a new behavior that other governments can learn to crack down on crypto?
[1] Nigeria's Battle with Crypto: Presidential Adviser Calls for Crackdown on Exchange Platforms
[2] Nigeria's banks barred from cryptocurrency transactions -central bank
[3] Nigerian central bank lifts ban on crypto trading
[4] Nigeria slaps strict rules on banks after lifting crypto ban

Oil is causing inflation. Same idea 💡

both are directly related to energy and its so called costs.

I could argue the like of working controllable fusion reactors is the issue.

If we had a portable moveable sun we could access resources all over the solar system.

The argument then would be a time shortage casues inflation. If we could live to 1000 we woukd have cheap time.

you get the idea.

[Mr. Magkaisa]

First thing is that if fiat is printing in a large number without any restrictions then it will gradually loss its value and other thing is that due to inflation fiat currency is losing money but still it is used widely and one cannot ignore its uses.

Cryptocurrency has its own place and success but if cannot devalue fiat because in our daily life we cannot use Crypto but we are using fiat. People are finding new ways of earning so crypto is in their way so that's why they are accepting crypto for earning but they are also using fiat for daily expenses.

         -   We know in this day and age that fiat or cash money is the king for now to get something we like in terms of assets or things. That's the truth. So I doubt that crypto can be the reason for fiat to lose value; as far as I can see, that's not what's happening now. Besides, cryptocurrency, or bitcoin, still stands second to fiat.

Digital currency has become an opportunity for many people around the world to believe in it, but for those who don't, we can't do anything because of their assessment of bitcoin or cryptocurrency.

[Stompix]

Oil is causing inflation. Same idea 💡

But ironically in this case, we're talking of a net exporter and oil producing country, so high oil prices would favor their own currency since they get more $ for the oil they sell, the problem is that demand for other stuff is high and the lack of local production to compensate that.
If it were just energy Nigeria would be fine, it's food and machinery needed for it as well as a hundred other things that are doing this to the forex rates.

[Dr.Bitcoin_Strange]

Well, Nigeria is not the only country in the world where cryptocurrency is being used by citizens, so I don't think their is any other country that have come up with that kind of claim that cryptocurrency is the cause of the devaluation of their fiat currency. Although, every country has it law and discipline, if the Nigeria government actually believe that cryptocurrency or binance is the cause of the devaluation of their precious Naira, they have already ban NGN/USDT on binance, so let's see what happens again since what they see as the root cause have been eliminated for now.

[taufik123]

-snip-
Digital currency has become an opportunity for many people around the world to believe in it, but for those who don't, we can't do anything because of their assessment of bitcoin or cryptocurrency.

Yes precisely digital currencies make everything better, increasing many opportunities for advancement of Traditional currencies.
Those who do not believe and continue to oppose valuable digital currencies such as Bitcoin and top altcoins will only say that Cryptocurrencies are scammers.

But seeing how crypto has grown rapidly to date, those who oppose it will not be able to live in peace because crypto is getting bigger.