Why Nigeria remains focused on crypto adoption despite national ban

On February 2021, the Central Bank of Nigeria came up with a new set of official regulations prohibiting national banks and financial institutions from offering payment options and transactions using cryptocurrencies. The decision caused controversy, and many Nigerian stakeholders, crypto users, and investors questioned the motivation behind the ban. CBN held that they were foreseeing the negative impacts of crypto adoption in the country’s financial market, which was proved wrong since the ban was officially implemented.

Almost 15 months have passed since the crypto banking ban, and the consequences of CBN’s decision are pointing in a different direction. Since the early stages of potential crypto implementation in Nigeria, this alternative seemed promising to uplift the quality of life in the country and dribble the shortcomings caused by the lack of job opportunities and surging poverty rates. The Nigerian government is known for its extreme measures that, in many cases, have significant economic impacts on their territory. However, this time, even their strong sense of authority was not enough to hamper the curiosity and steps Nigerians were already taking to enter the world of crypto.

Since cryptocurrencies were officially restricted in Nigeria, a lot has happened around the country’s financial sector. Banks could not fight against the threats imposed by the Central Bank of Nigeria and had no option but to comply with the new rules and cut ties with clients that had crypto-based accounts. Despite the drastic measures taken by financial institutions in Nigeria, there was still a lot to question regarding how this full ban would be sustained in a nation that is booming in technological development, a journey that is very much strengthened by the power of blockchain operators and solutions. So, would Nigeria really become a country with a 0-crypto policy?

To those who have been closely following up with how Nigeria’s relationship with crypto assets unfolded, the answer is clear: no, the country did not go completely crypto-free. Many of the debates around the adoption of blockchain technology are centred around the fact that it can be seen as a sweet escape from the traditional bureaucratic functioning of some outdated financial systems, which can go against what leaders worldwide might be planning for their economies. However, in markets like Nigeria, which is still paving its way to becoming a more developed country, the advantages of cryptocurrencies hit differently. From an international perspective, the Nigerian market is not seen as a risky territory for the trading industry, so facilitating tools, such as crypto, play a simpler, yet more impactful role on an individual basis.

The financial systems of developed economies have for long been functioning based on hierarchical services that ensure the safety and security of the basic financial needs of a country’s population. In these territories, cryptocurrencies are a symbol of higher investment, development, and supremacy. In powerful financial dynamics, crypto users boost the market with huge transactions that can hit a billion dollar margin within a day. Nigeria is not at all part of this scenario. The issues that crypto adoption may help solve in developing economies like Nigeria are more rooted. Nigerians have been dealing with restricted access to many financial possibilities because their motherland is still considered a fragile territory in the eyes of developed countries. Internet access, for instance, has also been affected by some discriminatory practices that were designed to leave the country out of solid international trading opportunities and commercial transactions. Nigeria is slowly climbing to the top of a mountain that has only been conquered so far by those with better equipment and still aims at what has been for long a well-established reality in other nations: financial freedom, mobility, right, and constancy.

So, considering this unstable and unprivileged background it is not like Nigerians can afford to simply agree to let a good opportunity go missing. Many users in Nigeria have been purposely going in the opposite direction and putting efforts into understanding how cryptocurrencies can really add up to their lives. Evidently, in view of the many needs and demands that are yet to be met, Nigerians are copious in their learning process. The enhanced privacy and possibility of building economic wealth anonymously are for sure features that attract many citizens to the crypto sector. Controversially, these advantages of blockchain technology are also precisely what challenges all the rationale behind CBN’s crypto bans. If it is safety they were worried about, fear no more; cryptocurrencies are rigorous in security and are a great option to fight against financial crimes.

The advanced monitoring solutions embedded in crypto transactions make it easier to track whatever goes wrong, making it challenging for those who try to get away with cyber crimes. In a country that still fights issues with precarious banking systems, blockchain providers are in favour of the population. Of course many users are growing their assets and knowledge based on small-sized transactions and Nigeria is still far from occupying a leading position in the crypto sector, but it gets closer to a more solid scenario with each step. Last week, an official report issued by the crypto exchange KuCoin stated that almost 34 million Nigerian citizens are already managing crypto assets transactions. The number of citizens who currently have access to crypto technology in the country is nearly 35% of its entire population, and it is likely to keep surging. When it comes to crypto adoption and expertise, Nigeria is a name to keep an eye on and what has been going on inside its market is likely to positively affect the economic growth inside and outside its territory.

George Hung

Chief of Staff

George Hung our chief of staff is a leader in management and B2B relations, running multiple successful business across many boarders.