- Recently, Binance has talked with Nigeria Export Processing Zone Authority to establish the first virtual economic zone in West Africa.
- NEPZA’s Managing director Prof Adesoji Adesugba expressed the company’s interest in breaking new grounds to widen the economic opportunities within Nigeria.
- The main aim of the Free Virtual zone is to establish a business space that promotes and harnesses the advantages of cryptocurrency trading and the use of digital currencies
Binance, the leading cryptocurrency trading and exchange company, has actively shown its support for promoting digital currencies in Africa.
It has held numerous ventures to promote cryptocurrency in Africa. Binance has targeted critical countries at the forefront of the crypto wave; Nigeria, Kenya, Ghana and South Africa. Recently, Binance has talked with Nigeria Export Processing Zone Authority to establish the first virtual economic zone in West Africa.
NEPZA aims to establish a crypto-friendly zone like Dubai Virtual Free Zone. The main aim of the Free Virtual zone is to establish a business space that promotes and harnesses the advantages of cryptocurrency trading and the use of digital currencies—effectively establishing a blockchain-driven virtual economy.
NEPZA’s Managing director Prof Adesoji Adesugba expressed the company’s interest in breaking new grounds to widen the economic opportunities within Nigeria. He further said that the country has the potential to achieve the goals of the economic development plan of President Muhammadu Buhari by taking advantage of the near trillion dollar virtual economy brought by crypto trading and digital currencies.
The talks also had an additional party, Talent City, a technology infrastructure company.
Why did Binance show interest in Nigeria
Nigeria is the current leading African country within the crypto space. It was among the first countries to adopt the crypto ecosystem and has one of Africa’s highest cryptocurrency trading rates. According to Triple-A, there has been a steady growth in cryptocurrency and digital assets from 2019 to 2021.
Currently, more than 42% of the total population of Nigeria own or at least use digital currency. The crypto ecosystem in Nigeria seems only to be growing.
Binance, over the years, has worked with different national governments and has established numerous ventures globally. It has even taken a step forward to educate African countries through Binance Academy about the crypto ecosystem and how it offers many opportunities.
In May 2022, it signed a Memorandum of Understanding(MoU) with Kazakhstan since they believe the country has developed into a regional hub for crypto traders and the crypto ecosystem. Binance has established many successful exploits in Africa and the world.
Some can even say choosing this path with Nigeria was a matter of time. Multiple technology companies and digital currencies such as Ethereum have established promising projects with Nigeria. Such projects include Synthetix, a platform where synthetic assets track the value of real-world assets. Compound a DeFi poster product, among others.
Nigeria’s Rising Potential
It is no doubt that Nigeria has had various successes when it comes to the crypto ecosystem. In 2020 Nigerian cryptocurrency trading company Bifxt raised $15 million in Series A funding. This feat created multiple jobs for the country and investments that have improved the country’s economy.
Nigeria has traded over 60,000 digital currencies for more than $500 million in the last five years. One of the leading reasons for the increase in cryptocurrency trading is the use of cross-border payments and transactions and sourcing other funds in other currencies.
Nigeria also launched its first digital currency, eNaira, in October 2021, the nation’s first Central Bank Digital Currency(CBDC). The digital currency is in its second phase. Despite the inflation levels the country has recently suffered, it still aims to drive financial inclusion by incorporating the unbanked citizens of Nigeria.
Binance still aims to build a crypto ecosystem in Nigeria despite opposition.
It is no news that Binance has faced strong opposition from certain parties over the years. Reuters alleged that even though Binance is moving to incorporate government oversight, it still withholds vital information on regulatory bodies and does not keep tabs on its customers. This has raised some friction among various ventures Binance has made.
In June 2021, the crypto trading company was flagged and cautioned by the UK’s Financial Conduct Authority (FCA) for exposing its customers to its complex and high-risk financial products.
In another report, it was discovered that Binance continued to register and serve customers in Russia, Ukraine, and five other countries. They were previously a money laundering risk and were acting against the recommendations of the compliance policy.
By June 2022, Binance acted as a conduit for money laundering of at least $2.35 billion in illicit money. This raised various legal issues that forced the company to withdraw from multiple ventures.
Despite these allegations, Binance has still taken the initiative to promote and increase the crypto ecosystem globally and within Africa.
NEPZA aims to build a similar zone to Dubai’s virtual zones, which provide crypto-friendly laws, regulations and tax incentives for the crypto ecosystem. By increasing the adoption of digital currency, Nigeria aims to stabilize its economy. The motive behind this move was to drive long-term economic growth through cryptocurrency trading and digital currency ownership.
The move is still new, so more details about the plan implementation are still in progress. Will this be the beginning of a new era in Africa? All we can do is wait and see.