A report by the cryptocurrency exchange, Bitget, in collaboration with an American management consulting firm, Boston Consulting Group (BCG) and crypto-focused investment firm, Foresight Ventures have declared Nigeria the second largest cryptocurrency market in Africa after South Africa. This is despite the ban on cryptocurrency trading by the Central Bank of Nigeria. 

The Managing Director of Bitget Gracy Chen identified the high ratio of population to crypto adoption in African developing countries (in the case of Nigeria, 40%) as a clear indication of a huge scope of growth. Although the Bitget boss stated that the derivatives of cryptocurrencies may delay use in the continent’s traditional markets. 

Key notes of the report 

  • The report highlights that while traders and crypto enthusiasts in South Africa use cryptocurrencies primarily as alternative investment, Nigerians use the digital currencies for savings. 
  • Again, the report states that Africa’s cryptocurrency centralized exchanges account for less than 1% on the global stage. 
  • On a global scale, only 0.3% of people’s wealth is stored in cryptocurrencies compared to the 25% invested in equities.
  • The report also disclosed that crypto adoption in the world is growing at such a rate that hedge funds and VCs “doubled their crypto exposure from $35b to $70b from Q4 2020 to Q4 2021.” 

In case you missed it 
In February 2021, the Central Bank of Nigeria directed all commercial banks in the country to stop processing cryptocurrency transactions in order to deal with the threat Nigeria’s financial system faced at the time. CBN even fined banks who defaulted in reporting cryptocurrency transactions. Later on in the year, the SEC Director-General announced that the commission had inaugurated a department to investigate the crypto industry. 

Following the restriction on the trade of cryptocurrencies in Nigeria, citizens resolved to peer-to-peer platforms to continue processing cryptocurrencies in the country. Nigeria’s Securities and Exchange Commission (SEC) then published a new set of rules guiding the issuance, exchange and ownership of digital assets, such as Bitcoins/NFTs in the country.

  • Reports from Paxful, Chainalysis and KuCoin, disclose that the trade of cryptocurrencies in Nigeria has increased amidst despite the ban.
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