The ongoing cryptocurrency boom has taken root in many countries all around the world, and perhaps the most surprising one in this regard is Nigeria.
While Nigeria may be one of the largest economies in Africa, and one of the most populous countries in the world, it is still a developing nation, and thus it has been quite encouraging to see the speed with which crypto has become an integral part of the economy there. Nigeria is the second-largest market for crypto in terms of volume of transactions, second only to the United States, and crypto adoption is extremely high. While there are multiple local factors behind this, it cannot be denied that Nigeria is a crypto superpower at present, and well on the way to becoming one of the most influential countries in this space in the coming months and years.
However, the attitude of Nigerian regulators and the government has been quite resistant, to the extent that the Nigerian central bank recently put out a directive asking banks and financial institutions to shut down accounts that trade in crypto. This is essentially a ban on crypto trading and ownership in the country, and has come as a huge shock to the industry. Nevertheless, the sector has continued to thrive, which shows just how much demand there is for crypto in Nigeria. One of the biggest reasons for this is the stringent rules and controls around foreign exchange in the country. The naira, Nigeria’s fiat currency, has been steadily dropping in value against the dollar for years now, which means that it is worth less and less as time passes. Thus, people looking for an alternative store of value have turned to crypto. At the same time, this has also led to controls on foreign exchange transfers as the central bank tries to control the value of the currency, and therefore Nigerians have been unable to freely send and receive money to family and friends outside the country. Crypto helps to get around these restrictions, as it is extremely easy to send crypto to anybody in the world. Crypto is also being used across various industries in the country, such as the online gambling space. Now in Nigeria a bitcoin casino with baccarat is quite common, where players can use cryptocurrencies to place bets on their favourite casino games, and this is just one example of how crypto is being used to attract customers across various sectors. All of this means that the crypto industry is thriving in Nigeria, and data from Paxful, a global peer-to-peer lending platform, only confirms this.
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According to Paxful, there are 1.5 million users of cryptocurrency in the country, making it one of the largest crypto markets globally. It is also telling that over $1.5 billion worth of Bitcoin transactions took place in Nigeria in just the last four months. Local geographical metrics show that Delta State has the most interest in crypto in terms of Nigerian states, followed by Anambra, Bayelsa, Ondo and Ekiti – which shows the strong presence of crypto in the southern part of the country. It is interesting, however, to see that in terms of specific coins, Dogecoin is far more noteworthy in the eastern and north-central provinces, such as Ebonyi, Plateau, Imo, Enugu, Niger and Nasarawa. Ethereum is being closely followed in Anambra, Ebonyi, Bayelsa, Imo and Cross, while Lagos, which houses the capital and is the most active by far on a socio-economic level, does not show up in the top ten for any of these coins. This is quite surprising, as Lagos is the hub for most of Nigeria’s domestic crypto platforms as well as the overall fintech industry.
This data shows that Nigeria’s ethnic and geographical diversity has played a huge role in the growth of crypto in the country, and fintech and crypto providers would do well to keep this in mind when designing products for the country.