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Cryptocurrency offers a significant opportunity to improve financial services for Nigeria’s 38 million unbanked adults.
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According to projections, crypto in Nigeria will grow to $32.6 million by 2024 and $52.5 million by 2028.
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Digital wallets and crypto remittances provide cheaper and more efficient alternatives for cross-border transactions.
Crypto is a familiar concept in Nigeria, as the country has one of the highest adoption rates on the continent. Statista projects its digital asset market revenue to reach $32.6M by 2024, with an annual growth rate of 12.66%.
This will result in a projected total of $52.5M by 2028. Recently, these figures show the rise of digital wallets in Nigeria. They also show Fintech organizations operating within the country and a more Web3-focused business, further improving its crypto remittance costs and ecosystem.
However, despite the positive history of digital assets, crypto regulation is still a sore spot for the country. Its government has clashed with the market due to its citizens’ overreliance on digital assets, adversely affecting its fiat currency.
Fortunately, after numerous ups and downs of its regulatory body, Emomotimo Agama, the Director General of the Securities and Exchange Commission, has publicly recognized the potential of crypto in Nigeria as a gateway to boost its financial inclusion rate and reach its country’s outstanding 38 million unbanked adults.
Crypto in Nigeria is the Key to Reaching the Unbanked.
Nigeria’s storm within the crypto industry could no longer remain unrecognized as the Director General, Emomotimi Agama, noted its massive effects.
During the 2024 Annual Conference of the Association of Capital Markets Academics of Nigeria, Agama revealed the potential and projection of digital assets. He saw crypto remittance costs as a better and cheaper alternative for most Nigerians.
ALSO, READ Nigerian Senate Pushes for Comprehensive Crypto Regulation to Stabilize Naira.
He further emphasized how the nation’s crypto market boasts one of Africa’s top-rated but sees its current valuation at over $400 million. This figure illustrates how a substantial portion of the population engages in crypto trading and transactions.
Despite the harsh ban on digital currencies and the complex nature of establishing crypto regulation, the SEC boss had to accept and embrace these facts. Approximately 33.4% of Nigerians own or use digital assets, representing an excellent opportunity to overhaul its financial inclusion rate.
According to the regulatory body, the country has over 38 million unbanked adults, representing an unprecedented opportunity for new forms of financial services.
Agama elaborated on the numerous advantages of low and affordable crypto remittance costs, particularly those without traditional bank accounts. He stated, “Some people don’t have bank accounts, but they have wallets.”
ALSO, READ; Nigeria’s FIRS Accuses Binance of Tax Evasion: The Unfolding Legal Battle.
Keep in mind that with the elevated growth of cryptocurrency, digital wallets in Nigeria have continued to grow and cater to the day-to-day needs of the ordinary citizen.
Bitcoin transactions are making life easier for a portion of the nation, especially those within the diaspora regions. Crypto in Nigeria has facilitated cross-border transactions, allowing numerous organizations, businesses, and individuals to transact with foreign entities at lower costs.
“We Just Need a Better Crypto Regulation Framework,” says Agama
One of the main problems with crypto in Nigeria and the entire industry is the need for a proper regulatory framework. Agama has clarified that he recognizes the challenges associated with crypto use in terms of regulatory uncertainty, security concerns, and financial literacy issues.
Crypto remittance costs would be a game changer for the nation, but unfortunately, navigating the legal jargon has proven quite a challenge for most.
Agama has emphasized the need for a clear, comprehensive, and eco-friendly crypto regulation framework that includes improved cyber security measures and financial education. This will protect investors, promote a healthy digital asset market, and allow the economy to benefit equally from taxation.
Unfortunately, achieving this feat is easier said than done. After numerous trials, only South Africa has successfully created and implemented a crypto regulatory framework in Africa.
The framework needs to be completed and still leaves much to be desired. It emphasizes that despite the continent having the highest adoption rate, it still needs to work on finding a balance between regulation and adoption.
Will Nigeria Take the Next Step?
Crypto in Nigeria has had a rocky journey with regulations. Although its recently lifted crypto ban showcased a ray of hope, the SEC has placed numerous limitations on what banks and financial institutions can do.
Digital wallets in Nigeria have continued to thrive, but insecurity is still a significant issue affecting their adoption.
Despite this, many still have hope for this field, with numerous benefactors, investors, legal institutions, and organizations constantly trying to create a future in which Nigeria will dominate the franchise.
Nigerian President Bola Ahmed Tinubu has openly advocated for digital assets, citing their numerous benefits as a means of trade and a tool for financial inclusion.
In April, President Bola appointed Agama as the new head of the country’s SEC in the hope of changing the perspective and approach towards establishing better channels for digital asset adoption.
This ray of hope was demonstrated after the Securities and Exchange Commission introduced an amendment to the initial Rules on Digital Asset Issuance, Offering Platforms, Exchange, and Custody.
According to Agama, this program is specifically designed for virtual asset services providers and offers a path for these entities to align with the updated regulatory requirements.