Nigeria’s Cryptocurrency Market Reaches $400 Million Milestone

The cryptocurrency sector in Nigeria has experienced a remarkable rise, climbing above the $400 million mark despite existing regulatory challenges, according to Emomotimi Agama, Director General of the Securities and Exchange Commission.

During a recent keynote at the Annual Conference of the Association of Capital Market Academics of Nigeria in Abuja, as per an official communique, the SEC’s chief conveyed this insight.

Agama delved into the obstacles and opportunities presented by digital currencies within the Nigerian economic framework.

He remarked, “Statistics reveal that from July 2022 to June 2023, Nigeria saw crypto transactions amounting to $56.7 billion, registering a 9% increase compared to the previous year.

“It’s estimated that the nation’s cryptocurrency economy is valued over $400 million, with a substantial demographic engaging in digital currency trade and exchanges.”

Further stressing the robust engagement rate, Agama emphasized that crypto transactions in Nigeria hit the $56.7 billion mark in the span of one year, showcasing durable adoption amidst economic turbulence.

He pointed out that roughly one-third (33.4%) of Nigerians actively participate in crypto trading, reflecting a deep market infiltration.

Regulatory ambiguity, security perils, and financial awareness are among the major issues threatening the use of cryptocurrencies, according to the SEC Director General.

“An absence of unified regulatory oversight has led to a climate of uncertainty which could dissuade investors and innovators alike. Additionally, threats such as hacking and fraud pose considerable dangers.

“A significant segment of our citizens lack essential financial education, leaving them susceptible to swindles and hazardous ventures,” he delineated.

The nation grapples with devising effective regulatory controls for the swiftly expanding digital currency market, aiming to strike a balance between fostering innovation, ensuring financial inclusion, and mitigating risks to financial stability and illicit activities.

The Central Bank of Nigeria articulated its apprehensions regarding the sizable volume of anonymous transactions coursing through cryptocurrency platforms in February.

It announced collaborations with additional governmental agencies to clamp down on these illegitimate financial streams.

It was reported last year that about $26 billion circumnavigated through Binance Nigeria from sources without identification.

Consequently, over the past three months, closer government scrutiny has been aimed at cryptocurrency trading services, due to suspicions of influencing the forex market’s local currency value.

Such scrutiny precipitated Binance’s exit from the Nigerian market and the subsequent removal of the naira from peer-to-peer (P2P) trading platforms.

The International Monetary Fund signaled to Nigeria last month the necessity of establishing a robust framework for the crypto market’s oversight.

Most recently, the Nigerian SEC issued a decree demanding all cryptocurrency entities and related businesses to re-register within a 30-day timeframe under its newly instituted regulations.