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EFFECT OF CRYPTOCURRENCY BAN POLICY ON UNEMPLOYMENT RATE IN NIGERIA

EFFECT OF CRYPTOCURRENCY BAN POLICY ON UNEMPLOYMENT RATE IN NIGERIA

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EFFECT OF CRYPTOCURRENCY BAN POLICY ON UNEMPLOYMENT RATE IN NIGERIA

Chapter One: Introduction

Background of the Study
The global financial system is undoubtedly embracing the present transformation from physical to practically virtual currencies via technology. This tsunami has brought about the emergence of cryptocurrency.

In light of this outbreak, there has been a lot of positive and negative discussion on the importance of cryptocurrency to the Nigerian fiscal system. Investors have poured money into crypto currencies, the most common of which is Bitcoin, in the hopes of recouping their investments in the near future.

To date, little economic research has shed light on the economic significance of cryptocurrencies. The majority of current cryptocurrency models are developed by computer scientists who are primarily concerned with the system’s feasibility and security.

Such concerns, however, are critical for determining the best layout and, consequently, the financial value of cryptocurrencies as a payment method.

Nakamoto (2008) defines bitcoin as a peer-to-peer electronic cash system. The cryptocurrency peer-to-peer system is built on blockchain, allowing transactions to occur directly between users without the need for an intermediary (Hameed & Farooq 2016; Grech & Camilleri 2017).

It enables for anonymous transactions between parties, so neither party knows the other’s true identity (Dierksmeier and Seele, 2016). This may be important since the full details of each participant’s transaction on the bitcoin blockchain are publicly available to other users (Bech & Garratt, 2017).

Unlike traditional currency, which is issued at a predetermined frequency by each country’s Central Bank, cryptocurrencies such as Bitcoin are mined using a fixed issuance mechanism, with the quantity of Bitcoins to be mined halving every year.

Although the use of cryptocurrencies as a basic money account is intended to give everyone the right to a verifiable digital identity (Johnston, 2002), there is much debate over its future.

Despite the hazards involved with this currency, its growth rate is both benevolent and demanding. Governments are caught off guard by its rapid expansion.

However, the overwhelming benefits of cryptocurrencies have allowed them to act as a source for satisfying the daily financial demands of millions of people who do not have a stable job and have experienced unemployment.

Unemployment is one of the developmental challenges confronting all developing economies around the world (Patterson et al, 2006), and Nigeria is no different. Unemployment or joblessness happens when persons are out of work and have actively sought work in the previous five weeks (International Labour Organisation, 1982; Fajana, 2000).

Though unemployment affects people of all ages, its impact has been disproportionately felt by young people. Unemployment is a global issue, but it is particularly severe in developing countries, with significant social, economic, political, and psychological ramifications.

It adds to poor GDP, increases crime and violence, has a negative impact on health, and creates political instability (Njoku & Ihugba, 2011). Unemployment is not a new issue in Nigeria; the national unemployment rate went from 4.3 percent in 1970 to 6.4 percent in 1980 and has subsequently risen.

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