Nigeria has emerged as a prominent player in the crypto market, with significant engagement and adoption by individuals. As the most populous African country, it has also become an attractive hub for blockchain funds over the past two years.
While there are positive statistics regarding how Nigerian citizens have embraced crypto assets, Emurgo’s report on Web3 in Africa suggests that there is still more progress to be made in fully operationalizing blockchain technology in Nigeria.
In terms of regulations, and clarity, the SEC classified cryptocurrencies in a report it released in 2020 while the Central Bank of Nigeria stopped commercial banks from facilitating crypto-related transactions in 2021.
On the other side, in May 2023, the NITDA, the organization responsible for developing the digital economy in the country, created and launched the National Blockchain Policy for Nigeria. There was also an introduction of a 10% tax on profits on digital assets.in the Finance Act in June 2023.
Fluctuating naira; acceptance of crypto
Emurgo also highlighted that the rise in cryptocurrency usage and crypto exchanges in Nigeria can be attributed to several key factors. One of these factors is the unstable economic situation, which has resulted in the devaluation of the naira.
The report also mentions other contributing factors, such as the desire for passive income among Nigerians and the limited availability of local job opportunities. As a result, many young Nigerians have turned to Web3 jobs, where they can earn crypto assets.
Furthermore, in its quest for digital alternatives to cryptocurrency and a vision for financial inclusion, the Nigerian government has introduced the e-naira — the nation’s Central Bank Digital Currency (CBDC).
The project has garnered more than 840,000 downloads, with over 252,000 consumer wallets and 17,000 merchant wallets. It has also facilitated transactions worth over $9 million.
Blockchain tokenization in Nigeria
The use of NFTs in Nigeria has been steadily increasing, with various unique projects and examples emerging across industries such as music, real estate, fashion, and art.
In the realm of real estate, Emurgo also mentioned Ellamediate, a Nigerian startup aiming to simplify property purchases globally for Nigerians.
While the real estate tokenization landscape in Nigeria is still in its early stages, some promising developments and projects have the potential to unlock the benefits of blockchain technology in the real world.