Nigeria is Set to Adopt Digital Cryptocurrencies- Mass Adoption for eNaira?

• The Nigerian Central Bank is set to pass a law and legalize  Bitcoin and other cryptocurrencies.
• The newspaper report comes a year after the CBN ordered Nigerian crypto exchanges and service providers to halt transactions related to cryptocurrencies.

Nigeria is set to legalize cryptocurrencies, according to a statement by Babangida Ibrahim, the chairman of the House of Representatives Committee on Capital Markets and Institutions. The bill, which is still under review, would amend the 2007 Investments and Securities Act to recognize Bitcoin (BTC) and other cryptocurrencies as legal capital for investment.

Ibrahim said that the bill is necessary to “keep up with global practices” and to ensure that Nigeria does not fall behind in the development of the cryptocurrency industry. He also noted that the bill would help to protect investors and to prevent the use of cryptocurrencies for illegal activities.

The bill has been met with mixed reactions. Some people have welcomed the news, arguing that it will legitimize the cryptocurrency industry in Nigeria and make it easier for businesses to adopt cryptocurrencies. Others have expressed concerns about the potential risks of cryptocurrency investment, such as fraud and volatility.

It is still unclear when the bill will be passed into law. However, if it is passed, it would be a major step forward for the cryptocurrency industry in Nigeria.

Background on cryptocurrency adoption in Nigeria

Nigeria is one of the most active cryptocurrency markets in Africa. According to a report by Kucoin, a cryptocurrency exchange, there are an estimated 33.4 million Nigerians who trade or own crypto assets.

The popularity of cryptocurrency in Nigeria can be attributed to a number of factors, including the country’s economic instability and the high cost of sending remittances. Cryptocurrencies offer a way for Nigerians to store their wealth and to send money internationally without having to pay high fees.

In 2017, the Central Bank of Nigeria (CBN) issued a circular prohibiting banks from facilitating cryptocurrency transactions. However, the ban has been largely ineffective, and cryptocurrency trading continues to thrive in Nigeria.

The CBN’s ban has also led to the development of a thriving peer-to-peer cryptocurrency market in Nigeria. This market allows Nigerians to trade cryptocurrencies directly with each other, without the need for a bank.

The eNaira

In October 2021, the CBN launched the eNaira, a digital currency backed by the Nigerian government. The eNaira is intended to improve cross-border trade, expand access to financial services, and boost the country’s economy.

However, the eNaira has been met with mixed reactions. Some people have welcomed the launch of the eNaira, arguing that it will help to modernize the Nigerian financial system. Others have expressed concerns about the security of the eNaira and about the potential for its use for illegal activities.

It is still too early to say whether the eNaira will be successful. However, the launch of the eNaira is a sign that the CBN is taking cryptocurrency seriously and that it is open to exploring the potential of digital currencies.

The future of cryptocurrency in Nigeria

The legalization of cryptocurrencies in Nigeria is a major step forward for the cryptocurrency industry in the country. It will legitimize the industry and make it easier for businesses to adopt cryptocurrencies. However, there are still risks associated with cryptocurrency investment, such as fraud and volatility.

It remains to be seen how the cryptocurrency market will develop in Nigeria in the coming years. However, the legalization of cryptocurrencies is a positive development that will likely lead to further growth in the industry.