Blockchain/DeFi Year in Review: Nigeria in Focus

Covid-19 worsened the already difficult economic reality for Nigerians, but interventions by Binance helped many to survive.

‍

Crypto: Nigerians Dare to Dream

Nigeria, the most populous nation in Africa boasts of being the giant of Africa. Indeed, the country has the largest economy in Africa and leads in a couple of other sectors such as education and military prowess. But there is one area the Nigerian government has been hesitant to push for leadership as a matter of policy: blockchain and crypto trading. 

2021 was a year of mixed vibes as far as blockchain development and crypto-trading in Nigeria are concerned. On the one hand, Nigeria has seen an unprecedented number of its citizens adopt crypto in various forms. To put it in clear perspective, a 2021 global survey by Statista found that 32% of people surveyed in Nigeria used or owned cryptocurrencies. That percentage was the highest in the world. In another independent study by Finder Nigeria still came out tops as the country whose population has the highest percentage of crypto owners. 

The reasons for Nigerians turning to crypto are not far-fetched. The country has a very high rate of youth unemployment. Many young people with no hope of getting any meaningful sustenance from the Nigerian government looked towards crypto in the hope of profiting from its positive volatile swings. Other Nigerians with better financial status saw investing in Stablecoins as a welcome hedge against the country’s unstable legal tender – the Naira. 

However, the Nigerian Government has historically opposed cryptocurrencies. In February 2021 Nigeria’s Central Bank wrote a letter to Nigerian banks and ordered them to close the accounts of individuals and entities involved in crypto transactions. The directive forced many fintech firms and even Binance to no longer support peer-to-business (P2B) crypto transactions through Nigerian banks. 

The Nigerian government argues that crypto is used primarily for money laundering and financial crimes. Many Nigerians on the streets disagree and only see the government’s directive as another case of oppression. Most Nigerians have since switched over to peer-to-peer (P2P) trading to try and bypass government restrictions.

eNaira Onboarded

While Nigeria tried to dissuade her people from trading crypto, the country pushed for a Central Bank Digital Currency (CBDC) of its own. The country’s apex bank released a draft in August 2021 detailing the guidelines for the operation of eNaira. Initially scheduled for launch on October 1, the eNaira was launched on October 25 after overcoming some legal hurdles. 

With the eNaira, Nigeria became the first African country to fully launch a digital currency as legal tender. The CBN claims that the eNaira is being increasingly accepted, though some Nigerians are sceptical of the move.

Notable Blockchain Firms

The Nigerian crypto-space for 2021 would be incomplete without the mention of indigenous blockchain startups, Afen Blockchain and Xend Finance. Despite Nigeria’s uncertain regulatory environment, Afen got approval from some agencies of the Nigerian government to exclusively digitalize legacy artworks as NFTs. 

On its part, Xend Finance made its mark as the first African company to develop a fully functional product on Binance Smart Chain. In September 2021 Xend Finance organised Africa’s largest blockchain DeFi Hackathon which had judges from Google, Binance, Huobi and Coindesk. The 3-month hackathon is one of Xend’s initiatives towards encouraging DeFi awareness. Xend is one of Nigeria’s finest, and perhaps one of Africa’s finest, blockchain exports to the world.

Binance Driving Adoption

The world’s top crypto exchange helped in no small measure to advance crypto adoption in Africa and Nigeria as we take the year under review. Binance organised a Masterclass series that trained thousands of Africans on the fundamentals of cryptocurrencies, various tutorials on cryptocurrency trading, and how to make a career in blockchain. Some series focused on specialised skills such as coding and blockchain development.

The series was worth more than gold to many people, coming at a time when there was a massive economic crunch due to the Covid-19 pandemic. Around 400,000 persons are estimated to have participated in the Binance Masterclass series. Nigerians make up a significant part of that number. These classes helped many Nigerians to acquire financial freedom and survive Nigeria’s unfriendly economy. 

Binance reduced the entry barrier of its Masterclass series to the barest minimum: entry and participation were completely free and open to any willing person. 

Furthermore, in November 2021 Binance appointed three popular Nigerian influencers Whitemoney, Cross, and Pere to encourage the adoption of crypto by Nigerians. Nigerians will not forget Binance in a hurry. No other crypto-based organisation has taken far-reaching measures to help the cause of crypto in Nigeria as Binance has done. 

Future Outlook

Contentions between the Nigerian Government and her Citizens over the legitimacy of cryptocurrencies are likely to continue going into the future. So far, it seems that harsh government policies towards crypto have not had much effect on the crypto appetite of Nigerians. Despite CBN’s clampdown, the volume of crypto transactions by Nigerians have increased rather than decreased. The year 2022 seems poised to throw up more defining events in Nigeria’s

Source : bsc.news