When considering the global blockchain revolution, most people envision Silicon Valley, Asia’s prominent crypto centers, or even El Salvador’s Bitcoin venture. Not many would typically think of Nigeria, which is a considerable oversight, as this country is swiftly becoming a leading force in the blockchain and cryptocurrency landscape.
In Nigeria, blockchain’s significance extends beyond mere investment in popular digital currencies. As Africa’s fourth-largest economy and most populous country, Nigeria also faces substantial challenges with corruption. For millions of its citizens, blockchain offers a means to counteract inflation, circumvent dysfunctional financial structures, and gain entry into the global digital economy. Across cities like Lagos, Abuja, and Enugu, a diverse group of developers, students, traders, and entrepreneurs are leveraging blockchain technology not driven by fleeting trends, but by its proven effectiveness and often its singular capability to provide viable solutions.
What Fuels Blockchain’s Growth in Nigeria
The surge in blockchain adoption within Nigeria has come as a surprise to many. Nevertheless, several factors suggest its near inevitability. Foremost among these is the youthful demographic, with over sixty percent of Nigeria’s populace being under twenty-five, making it the youngest nation on the African continent. This, coupled with pervasive smartphone penetration, creates a generation poised to embrace and integrate digital innovations.
Another contributing factor is economic strain. With inflation frequently reaching double digits, the populace faces financial difficulties and is compelled to utilize Bitcoin and stablecoins to safeguard their accumulated funds. Restricted availability of conventional banking services also presents a challenge, as a significant segment of Nigerians cannot access modern banking facilities, making blockchain the sole accessible financial remedy for numerous individuals. Lastly, Nigerians are recognized for their entrepreneurial spirit and possess a flourishing startup ecosystem actively engaged in developing and leveraging blockchain infrastructure.
Consequently, the nation consistently ranks among the top ten globally for cryptocurrency adoption, having registered $59 billion in cryptocurrency value received between July 2023 and June 2024.
Practical Applications of Crypto in Nigeria
Among the most significant practical applications of cryptocurrency in Nigeria are remittances and peer-to-peer transfers. A substantial portion of the $20 billion sent back home by Nigerians living abroad arrives in the form of crypto, as senders seek to avoid engaging with the Nigerian central bank.
Blockchain has also significantly influenced Nigeria’s expanding online gaming and casino sector. The country’s youthful demographic dedicates considerable time to online gaming, with iGaming being highly prevalent. Some of the world’s leading Litecoin casinos enjoy substantial popularity in Nigeria, primarily due to LTC’s minimal transaction fees and rapid confirmation speeds.
Web3 applications are experiencing significant expansion across both Nigeria and the broader African continent, with emerging companies like Nestcoin leading this growth. While not exclusively blockchain-based, the fintech startup Sudo Africa also plays a crucial role by facilitating seamless card issuance. Another key enabler in the blockchain space is Yellow Card, a pan-African crypto exchange that provides fiat on-ramps for various currencies, including the Nigerian naira.
The Nigerian Government’s Role
The Nigerian government’s relationship with cryptocurrency has been complex and fluctuating. In February 2021, the Central Bank of Nigeria (CBN) implemented measures that effectively prohibited banks from processing crypto transactions. This action aimed to eliminate cryptocurrencies from the nation’s financial system; however, it did not achieve its intended outcome. Individuals continued to engage with digital currencies, adapting their transactional methods by shifting to peer-to-peer platforms and thereby circumventing the conventional banking sector.
During the same year, the CBN introduced eNaira, one of the world’s initial central bank digital currencies (CBDC). Unfortunately, public adoption remained low, with many preferring stablecoins such as USDT. A prevalent reason cited for the eNaira’s limited uptake was a lack of public trust in the government.
More recently, however, conditions have begun to improve, as the Nigerian Securities and Exchange Commission (SEC) has been developing a regulatory framework for digital assets, which includes provisions for their taxation. While its full implementation may require time, this undeniably represents progress in the right direction.
