GM from Nigeria
We’re thrilld to bring you in on our continuous quest on the nature of crypto in different countries. In this episode of ‘GM From’, we are featuring the space in Nigeria thanks to our guest author, Ifeoma Blessing. Nigeria is beautified with multi-ethnic groups and over 250 native languages, and the crypto space itself is equally multifaceted, and it has grown from a vague topic to a popular opinion in Nigeria. Read on for all things crypto in Nigeria, including regulation, the youth's involvement and the future of Web3.
At Thrilld Labs, our team has included people from around the world, coming from countries such as the Netherlands and Italy to South Korea, Kazakhstan, Russia, the United States, Nigeria, and China too!
Fundamentally, we argue that this global collaboration is a big part of what Web3 intends: an ecosystem or industry that removes traditional barriers to participation thanks to its inherent construction around a decentralized network. However, even with these decentralized beginnings, there remain challenges for everyone to have the same opportunities.
Whether it be from the lack of an internet connection or computer software, an intimidating knowledge gap, or legal limitations, your location is a determining factor. Where you live and who you are surrounded by, fortunately or unfortunately, do influence your work environment and how easily you can enter the Web3 space (or any, for that matter!).
Simply put, the global nature of Web3 is apparent, however, less so in some places compared to others. And yet we see the global nature of Web3 in global teams (such as our own :)), an increasing number of international Web3 companies, and, last but not least, all the Web3, blockchain, crypto and other related events taking place around the world each month of the year!
While it is true that the Web3 ecosystem is more developed (or perhaps widespread is better) in certain regions when compared to others, there is still a significant number of users and builders from so many locations that are shaping the space. As a global Web3 company, and one that actively works with international events, communities, and partners, we are curious to know more about the Web3 ecosystem and emerging crypto spaces in different countries.
Therefore, for anyone working or interested in the Web3 space, having a global contextualization and understanding the barriers (and successes) that the average person faces is a critical step for advancing inclusion and activity in Web3.
In this edition of “GM From” we consulted with Ifeoma Blessing – who is intrigued by blockchain, cryptocurrency and decentralized technologies – on the Web3 landscape in Nigeria. Ifeoma, herself born in Nigeria, is a recent graduate of University of Nigeria (Nsukka). She is a Medical Lab Scientist, and a skilled content writer. As a Web3 enthusiast, she is passionate about simplifying Web3 to relatable and friendly content.
Where It All Began
Welcome to Nigeria, popularly tagged the giant of Africa. Located on the West Coast of Africa with borders like the Republic of Benin, Chad and Cameroon, Nigeria is beautified with multi-ethnic groups and over 250 native languages. The nation consists of thirty-six solid states plus the federal capital Abuja. Economic activities revolve around manufacturing, communication, technology and entertainment industries.
You are aware of how cryptocurrency has revolutionized the tech space and its economic system around the globe. Well, Nigeria isn't left out in the dynamic rise and boom of cryptocurrency. Instead, Nigeria is one of the ten leading countries that deal in cryptocurrency. According to Chainalysis, Nigeria is the top African crypto economy in the 2023 global crypto adoption index. It is also the top country in Africa's crypto investment.
Nigeria is blessed with youth who are excited about the tech industry, yet many Nigerians have become very careful of various get-rich-quick schemes. Before the advent of crypto in Nigeria, networking schemes like MMM (Mavrodi Mundial Movement), Ultimate Cycler and Get Help Worldwide existed. MMM was the most prominent because it yielded 30% return monthly and 10% for endorsing newbies. MMM folded in December 2016 with a $50M loss. The scenes from MMM fostered the involvement of many Nigerians – especially the youths – in the crypto space.
The acceptance of crypto in Nigeria has been a rollercoaster.
The government, alarmed by the interests of the populace in the digital currency, passed legislation to regulate the activities of crypto in Nigeria. Dating back to 2021, the Central Bank of Nigeria (CBN) also regulated laws that prevent banks and financial institutions from signing transactions on cryptocurrency. Many Nigerians who were starting to embrace crypto were puzzled at the new dawn.
The nation has faced various groundbreaking events in its crypto adventure. To start with, the masses perceived crypto as a rescue to the breakdown of their fiat (traditional) currency Naira. Inflation in the legal tender and accelerating fuel prices also powered the adoption of crypto in Nigeria. Many rely on crypto as a means to protect value and eliminate third-party scrutiny. The populace also seeks to remove the control exerted by intermediaries like banks during transactions. Many folks are intrigued by the convenient and quick transaction crypto offers.
The risks of crypto as perceived by the populace include being an asset for money laundering and fraud, and so forth. The irreversible nature of crypto transactions also scares some folks from getting involved. Decentralization made it impossible to reverse transactions. Ignorance is also a driving factor retarding the growth of crypto in the nation. Misinformation causes some Nigerians to see crypto as a means to get duped. The popular internet crime perpetrated by young folks tagged ‘yahoo boys’ in Nigeria contributes to these beliefs. These yahoo boys use cryptocurrency to mask their internet scams and fraud thereby making crypto seem like a negative investment.
Regardless of these setbacks, crypto trading continued to expand in the country. From the gold Bitcoin, Ethereum and stablecoins, the crypto space in Nigeria grew from a vague topic to a popular opinion. Decentralized finance, non-fungible tokens and decentralized applications aren’t novel concepts among the populace, especially the youth.
The Central Bank of Nigeria vs. Cryptocurrency
In 2021, the CBN initially mandated all financial institutions to close customers' accounts involved with cryptocurrency. The people didn't budge and turned to alternative methods to trade cryptocurrency. The government later reversed the law concerning crypto as it continued to flourish within the nation. The CBN invented the Central Bank Digital Currency (CBDC) also called eNaira as a means of regulating crypto.
What's the purpose of having CBDC?
Since crypto lacks control and isn't legal tender, the CBN wanted Nigerians to substitute and inculcate the digital currency as a means of exchange. In their opinion, it's centralized and accepted as a means of exchange anywhere in the country, unlike cryptocurrency.
The government claimed that they were looking out for the masses. They weren't to be held responsible for any loss from crypto. The government was aiming to prevent money laundering, terrorism financing and other vulnerabilities associated with cryptocurrency. Intangibility can reduce the scope of crypto investments in Nigeria. Yet, the masses are arguably influenced by the profits from their investments. You will likely reckon that the interests of the investors need to be protected. The intangible nature of crypto necessitates well-carved-out rules and regulations guiding it, some might argue.
Nigerians persisted in their crypto adventure, regardless of the regulations of CBN.
The populace resorted to alternative methods like P2P (Peer-to-Peer) platforms to perform crypto transactions. The continuous crypto dealings by Nigerians are largely thanks to the decentralized nature of crypto. The delight of Nigerians is spurred by how much they can control their crypto assets without the interference of another party. The increased innovations of smartphones and the internet heighten the adoption of crypto in Nigeria.
Also, crypto offers low to almost no charges for transactions. Some folks in the country use cryptocurrency transactions to evade the payment restrictions made by foreign countries. For example, the issues encountered with payment platforms like PayPal encourage many Nigerians to opt for payments in crypto. Electricity tariffs and unemployment are also driving factors fostering the adoption of crypto in Nigeria.
In 2023, the Buhari government made a reverse statement to promote crypto in Nigeria. The ban on cryptocurrency bank accounts was lifted. It prompted the market to witness some progress as the Nigeria Security and Exchange Commission (SEC) encouraged the CBN to regulate the activities of banks.
The crypto space is never calm. In 2024, the country faced a watershed due to currency volatility and the disagreement with Binance over missing funds.
What's The Future of Crypto in Nigeria?
The government hasn't been straightforward in the crypto space, it's been a walk-on-a-bottle situation yet Nigerians remain top crypto buffs around the globe. The approval of crypto by the CBN is a positive leap into a new adventure. From changing their unfavorable view of crypto to a conceding perspective, the CBN has admitted the potential of crypto in Nigeria. We can see the results in the termination of the ban issued to banks from operating crypto accounts.
The nature of cryptocurrency in Nigeria is thus progressive notwithstanding the ups and downs. Crypto generally is fuelled by taking risks and market predictions. It is no longer a novel idea in the country but a popular aspect of technology. Various social media platforms and establishments like 'Web3 Nigeria' are actively involved in educating and coaching individuals on cryptocurrency. More education on crypto is needed to eradicate ignorance and get many Nigerians informed. It will also allay the perception of crypto as fraud by many thereby enhancing the growth of crypto in Nigeria.
The global nature of Web3 means that the opportunities, challenges, and innovations we see in one region can shape the ecosystem as a whole. As we ask, “What is Web3 really about?”, the answer often lies not in one country’s adoption or success, but in the combined efforts of communities and people around the world. That’s true symbiosis.
By looking at Nigeria’s role in crypto and blockchain, we see how decentralized technologies can take root in emerging markets. It stands out that crypto in Nigeria has not had an easy path, facing suspicion from the government and individuals alike. Yet, on the other hand, there’s an unapologetic push. A drive forward, led by an enthusiastic and ambitious youth and sustained by the value-add from the technology itself. Indeed, improved efficiency in payments systems, open accessibility for all individuals, lack of intermediary fees and control, and the option of an alternative to native fiat currency all offer an appealing leg up in this tech-oriented, immense country.
Across the text are some confessions from a few Nigerians about their crypto journey.
About the Author
Ifeoma Blessing is a recent graduate of University of Nigeria Nsukka. She is a Medical Lab Scientist, and a skilled content writer. She is a web3 enthusiast passionate about simplifying web3 to relatable and friendly contents. She is born in Nigeria. Ifeoma Blessing is intrigued and inspired to build knowledge in blockchain, cryptocurrency and decentralized technologies.
References
The Rise and Fall of Cryptocurrency in Nigeria
Crypto in Nigeria -Surge in Adoption and Regulatory Shifts
Ayadi, O.F., Paseda, O., Oke, B.O. and Oladimeji, A. (2024), A survey of attitudes, behaviors and experiences of Nigerian investors in cryptocurrencies, Journal of Internet and Digital Economics, Vol. 4 No. 2, pp. 83-98.
Acho , Y. (2021). Crypto-Currency and the Nigerian Economy. Journal of International Relations Security and Economic Studies , 1(3), 43-58.
