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The digital economy has seen a steady increase in crypto technology by young Nigerians and startups, to pay for goods and services.
Nigeria’s information and communication sector (digital economy) grew by 15.09% in real terms in Q2 2020, compared to growth of 9.99% in Q1 2020 and 9.01% in the second quarter of 2019, due to the disruptions caused by the pandemic on the financial markets.
In the first quarter of 2020, Bitfxt – a fast-growing Nigerian crypto-trading firm, raised $ 15 million in Series A funds to expand its operations, which has created more jobs and investments in an economy in dire need of inflows cash.
The Lagos-based crypto startup allows consumers to buy and sell cryptocurrencies. That macro shows the speed with which Nigerians are tapping into crypto technology, which in turn is boosting Nigeria’s economy.
Otatade Happy, a Paxful Peer, in an exclusive interview with Nairametrics, talked about how the prevailing evolution of cryptocurrencies can give further impetus to the Nigerian economy, in terms of payments and transactions.
“We know how difficult it is to send money from Nigeria to other countries, but with encryption, payment can be made instantly without the hassle of queuing at the bank. I can also get money from abroad without stress.
“The fee for transferring cryptocurrencies from one wallet to another is really small. For this reason, many people are embracing cryptography in Nigeria and the older generation will soon accept it. “
Unsurprisingly, a significant number of young Nigerians have started using cryptocurrencies, in an effort to avoid the many challenges faced by traditional money transfer services, such as high cost and low speed, among others.
The evolution of the prevailing cryptocurrency in the Nigerian economy is already printing successful startups based on reports that a Nigeria-based cryptocurrency exchange startup, Yellow Card, has raised $ 1.5 million in seed capital from the famous American company venture capitalist Andreessen Horowitz, and a fast-growing cryptocurrency hedge fund, Polychain – to push its reach into the vibrant African crypto market.
Raymond Asogwa, ambassador of Paxful and Power trader, spoke about the advantage that cryptocurrencies bring to the Nigerian economy.
He said: “Crypto has offered many opportunities and a new niche that the Nigerian workforce can leverage on. The Nigerian tech industry is booming due to exposure to blockchain technology. “
In an explanatory note to Nairametrics, Ekene Ojieh, Head of Public Relations and Corporate Strategy at Buffalo Chase, a crypto analysis firm, provided key insights into how some Nigerians are using cryptocurrency to preserve wealth.
“Nigerians use bitcoin not only as a store of value, but also as an investment. Over the past 30 days, bitcoin has gained over 28%. Its accessibility allows anyone to send and receive bitcoins from anywhere in the world, as opposed to getting US dollars for international transactions.
“It is noteworthy that bitcoin is still a volatile asset. The advantage of this is that you can make a significant amount of profit in a short amount of time “, Ojieh said.
Recently, a Nigerian women’s rights group known as the Feminist Coalition used the power of cryptocurrencies to push for police reforms during the #EndSARS protests. The group used cryptographic technology to receive funds and provide the necessary financial support to protesters in Lagos, Abuja, Port Harcourt, among others, as well as to pay for the medical bills of some injured protesters.
The group has resorted to accepting only Bitcoin donations, using BTC Pay, after the Central Bank of Nigeria (CBN) placed an embargo on its transactions. BTC Pay is a free, secure, decentralized and censorship-resistant platform.
Bottom line
A significant number of Nigerians and startups are rapidly adapting to arguably the most disruptive technology ever invented: Crypto. As a result, increased use of cryptocurrencies is driving Nigeria’s economic growth at a time when the COVID-19 pandemic has negatively impacted Nigeria’s export commodity: crude oil.
A few months ago, the Nigerian Securities and Exchange Commission (SEC), proposed a new set of rules aimed at regulating investments in Crypto-tokens or Crypto-coins, when the character of an investment qualifies as securities transactions. This further highlights the importance of cryptocurrencies for the Nigerian economy.
