…As Nigeria Emerges Highest Performing In Bitcoin Business
After years of advocacy, cryptocurrency companies in Nigeria, as well as traders, may now expect rules guiding digital currency in Nigeria as analysts said it has in recent times been the succour to unemployed Nigerians and an alternative to the foreign exchange challenges of some importers.
This is as a report showed that Nigeria, in terms of Bitcoin’s level of interest, has been adjudged the highest performing nation in the world and also the biggest source of BTC trading volume in the continent. According to a recent report released by blockchain.com, Nigeria emerged one of the fastest-growing crypto markets globally.
Although the digital currency had over time been disclaimed by regulators, National Economy findings showed that there may be a set of regulations guiding cryptocurrency trading in the country before the end of 2020.
The Securities and Exchange Commission (SEC), the Central Bank of Nigeria (CBN) and the Nigeria Deposit Insurance Corporation (NDIC) had come together to form a committee to look into adopting regulations for digital currency in the country.
A statement to National Economy signed by head, Registration Exchanges Market Infrastructure and Innovations at SEC, Emomotimi Agama read, “The committee presented its report at the last Capital Market Committee (CMC) to management and would now make a presentation to the new management this week after which regulations will be crafted out.”
Sources familiar with the updates, told National Economy that the committee had been regularly meeting, although there had been a slowdown in the work due to the COVID-19 pandemic. However, the sources said members of the committee are working hard to come up with regulations for digital currency in the country before the end of the year 2020.
Commenting on the issue, marketing and community lead at Luno Nigeria, a cryptocurrency trading platform, Chinedu Obidiegwu, noted that a set of regulations to guide the digital currency trading in the country would go a long way in educating Nigerians as cryptocurrencies have become the go-to option for many as an investment vehicle as well as an alternative to foreign exchange.
“There has been a lot of discussions around regulations and as far as we know the SEC has been working on regulations for space and they have not released regulations yet. So as of now, there is basically no regulation but we know that there has been a lot of work going on. A lot of stakeholders are also meeting with regulators.
“The reality is that cryptocurrency is here to stay and there is a lot of merit to it. We (Nigeria) are working in the right direction and the conversation around regulation would help to separate the sheep from the wolves.
“With regulation people will be more educated and become more informed. People will understand what it is about, what to look out for and how to protect themselves from people who also want to use it as a means to swindle people. Just like any industry especially a new one, there is always people looking to take advantage of the lack of information so once there is regulation it would also help with the education drive which we have been working a lot on to make sure that people are not falling for fake schemes and people are doing their crypto business on genuine platforms.”
On the merits of digital currency, Obidiegwu said there has been increased use of cryptocurrency today as an investment. “Bitcoin, for example, has been referred to as digital gold which is an alternate currency. People will usually invest in this when there is uncertainty around currencies and the likes.
“As an investment vehicle, it has proven to be profitable. It was the best investment of the last decade since 2009, when it was launched, it is even better than any other kind of investment and this year it has continued to live up to that reputation even though it dropped, it picked up really quickly and instead has grown regardless of the COVID-19 effect on economies. So it has proven to be a viable investment.
“Also because you can move value to any part of the world in a matter of minutes, people use it for that, some people even use it for international trades. There are many uses that people have found for it and once people find value in something they adopt it.
“We have seen an increase in those holding and those that are trading. A lot more people move funds than those that are holding, as a lot more people have learnt to trade and they do that as their full-time job. Because many people lost jobs and income crypto has become a nice way to keep above water and so it has become an option for people to survive,” Obidiegwu stated.
On his part, financial technology expert, Emeka Okoye, noted that the increased activity in the Nigerian cryptocurrency market could be traced to the shortage of foreign exchange in the country. The new wave is happening because of the shortage of foreign exchange. So traders are buying cryptos and then finding a way to transfer those cryptos to their supplier.
“It is going to be temporary until forex inflows come in. One good thing about it is that it can be seen as a tool for solving payment challenges, for instance, remittance. For now, it is still not easy to send the foreign exchange to Nigeria so some people might want to use crypto because of cost of remittance. So there are already services where crypto is converted into naira immediately. It is not that crypto is being sent to the end-user per se to be used, it is to solve the problem of sending of money home.”