Binance’s Role in Promoting Widespread Blockchain Integration
CryptoChipy Ltd understands that this agreement with Nigeria mirrors previous partnerships between Binance and other regions, such as Dubai. In December 2021, Binance agreed to assist Dubai in creating a global digital asset hub to foster long-term economic growth and encourage crypto companies to acquire licenses within the United Arab Emirates (UAE).
Binance’s partnership with Nigeria resembles its agreement with the South Korean city of Busan. The cryptocurrency exchange had signed a memorandum of understanding (MoU) with Busan authorities for technological and infrastructural support to develop the blockchain ecosystem and enhance the city’s Digital Asset Exchange.
Additionally, the Securities and Exchange Regulator of Cambodia (SERC) has partnered with Binance to strengthen the nation’s security sector, while Cameroon has also teamed up with the platform to boost crypto and blockchain adoption.
The Growing Popularity of Cryptocurrencies in Nigeria
The Managing Director of NEPZA, Adesoji Adesugba, stated that the authority’s main goal is to establish a successful virtual free zone to capitalize on the near trillion-dollar blockchain and digital economy. Nigeria, the most populous country in Africa, seeks to use digital technology to diversify its economy beyond its reliance on the oil industry. The virtual free zone will also attract Nigeria’s increasingly connected and youthful population. The country has seen a rise in fintech startups like Flutterwave Inc. and Interswitch Ltd, both valued in the billions.
The Nigerian government has already introduced regulations for trading digital assets. Furthermore, Nigeria Exchange Limited plans to launch a blockchain-enabled platform next year to enhance trading at its stock exchange and boost investments in the regional economy. This initiative was confirmed in June by the Chief Executive Officer of Nigeria Exchange Limited, Temi Popoola, as part of an effort to appeal to young investors and expand its reach.
With one of the highest cryptocurrency adoption rates globally, Nigeria ranks alongside Kenya, South Africa, and Tanzania, with around 22 million crypto owners. The country has made significant strides, particularly in Bitcoin adoption. Nigeria’s crypto market is one of the fastest-growing, with its peer-to-peer Bitcoin trading volume surpassing $1 billion between January and June 2022. CryptoChipy confirms, citing Paxful, a peer-to-peer exchange platform, that Nigeria remains one of the largest markets globally. According to Paxful, the country’s trading volume in the first half of 2022 was $400 million, adding to $760 million from 2021.
The recent collaboration with Binance follows Nigeria’s launch of its Central Bank digital currency (CBDC), the eNaira, in October 2021. The eNaira became the second CBDC to launch globally after the Bahamas’ Sand Dollar. As of now, the eNaira has recorded transactions totaling 4 billion Naira ($9.2 million).
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Cryptocurrency Remains Restricted in Nigeria
Despite Nigeria’s high crypto adoption, the government remains hostile to the industry and has banned crypto transactions. The Central Bank of Nigeria ordered commercial banks to block crypto transactions, citing concerns over the broader impact on the country’s financial system. However, this restriction has not deterred the young population from using cryptocurrency. Nigeria’s Securities and Exchange Commission has published regulations for digital assets to protect investors and encourage market transparency, indicating a shift towards favoring the technology.
