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…Nigeria second on top 20 global crypto adoption list

Crypto adoption in Nigeria has continued to gain traction despite crackdowns by regulatory authorities.

Africa’s most populous nation retained its number two spot on the 2024 Global Crypto Adoption Index Top 20, according to Chainalysis, a global blockchain platform.

This ranking, which is part of the ‘2024 Global Crypto Adoption Index’ released in September, analysed 151 countries based on factors such as population size and purchasing power.

Nigeria was the only African nation in the top 20 this year, unlike 2023 when Morocco also made the list and ranked number 20. Once again, Nigeria was dwarfed only by India, which held the top position in 2023 and 2024.

Chainalysis reported that global crypto activity surged between the last quarter of 2023 and the first quarter of 2024, reaching levels that exceeded the 2021 crypto bull market. The launch of a Bitcoin ETF in the United States was cited as a key factor driving Bitcoin activity worldwide.

Nigeria’s achievement comes in the wake of a national clampdown on cryptocurrency transactions in 2024, despite the Central Bank of Nigeria (CBN) lifting restrictions on digital currency use in 2023.

Using Binance as a scapegoat, the country asked telecommunication firms to restrict access to crypto platforms and directed operators to delist naira transactions. The government accused these platforms of encouraging the manipulation of the naira to dollar rates and aiding illicit flows.

In February, Olayemi Cardoso, governor of the CBN, disclosed that $26 billion flowed through Binance Nigeria in one year from unidentified sources and users.

Two Binance executives, Tigran Gambaryan and Nadeem Anjarwalla, were arrested by the Nigerian authorities. Anjarwalla escaped from the Abuja guest house. His colleague, Gambaryan, is still in court.

Despite these efforts, crypto adoption has refused to wane, with the country picking up where it left off in 2023. The volume of crypto transactions grew nine percent year over year to $56.7 billion between July 2022 and June 2023.

“Nigeria is one of only six countries in the top 50 by size globally whose crypto transaction volume grew year-over-year in the time period we studied,” Chainalysis said in 2023.

Peer-to-peer (P2P) transactions have played a role in sustaining crypto growth in the country. Nathaniel Luz, chief executive officer of Flincap, noted that Nigerians have beaten the odds to push the industry forward.

The government’s stance on cryptocurrency, however, appears to be evolving.

Zacch Adedeji, chairman of the Federal Inland Revenue Service (FIRS), and Emomotimi Agama, director-general of the Securities Exchange Commission (SEC), have both acknowledged the potential of the crypto sector.

Adedeji said, “We cannot run away from the cryptocurrency ecosystem because it is the in-thing. But as it stands in Nigeria today, there is no law that regulates cryptocurrency operations. We need a law that regulates that area of our economy. This is why we are having this engagement with the legislators. We will regulate it in a way that is not injurious to the economic development of Nigeria.”

In August, the SEC granted approval in principle to two digital asset exchanges to begin operations under its Accelerated Regulatory Incubation Program (ARIP). Five firms were admitted to test their models and technology under the Regulatory Incubation Program.

Speaking at BusinessDay’s Blockchain event, Agama highlighted the increasing importance of cryptocurrencies as digital assets that enable secure, low-cost, cross-border transactions. He said this informed the SEC’s decision to introduce regulations and issue licenses. According to Agama, about 50 crypto exchanges have applied for operational licenses in Nigeria, underscoring the sector’s growth potential.

“Nigeria can no longer afford to keep pushing digital assets underground, for obvious economic and security reasons, especially when you are number one in crypto adoption in Africa and a leading market in the globe,” stated Senator Ihenyen, lead partner and head of blockchain and virtual assets practice at Infusion Lawyers.

Industry players believe the recent licensing of crypto exchanges will encourage growth as more participants will move their assets to regulated platforms.

Francis Ogbuka, vice president of sales and development at Zone, noted that regulation provides a sense of safety for investors.

Buchi Okoro, CEO of Quidax, agreed, noting that regulation will help protect investors and ensure compliance among operators.

Okoro, Quidax said that regulation will help check operators’ activity in the space and protect investors, improving confidence and adoption.

“It is a win for the industry,” he said. “This will make crypto more mainstream. Many people have been burned by scams, and regulation provides a safeguard, boosting confidence for both retail and institutional investors.”