According to a Chainalysis evaluation, Nigeria's crypto transaction volume increased by 9% to $56.7 billion in a year

Nigeria, the most populous nation in Africa, has seen its fair share of ups and downs in terms of cryptocurrency acceptance and trade.

Nevertheless, despite the regulatory challenges the developing technology continues to confront in the nation, a recurring pattern that has emerged over time indicates that the country’s population and retail crypto trading cannot be separated.

A report on cryptocurrency adoption and usage was released Tuesday by blockchain research company Chainalysis. According to the analysis, between July 2022 and June 2023, the value of crypto transactions in Nigeria increased by 9% annually to $56.7 billion.

The study is revelatory because reaching such goals under such conditions is amazing, especially in light of the persistent economic issues the nation faces, like inflation and currency depreciation.

Information about the Chainalysis report

The New York-based company’s analysis claims that between July 2022 and June 2023, Nigeria’s volume of cryptocurrency transactions increased by 9% year over year, reaching a total of $56.7 billion.

Within the same timeframe, Uganda, a different African nation, also experienced impressive growth. Between July 2022 and June 2023, there was a 245% growth in cryptocurrency transactions in the eastern African nation.

On the other hand, Kenya saw a decline in cryptocurrency transactions. According to the report, cryptocurrency usage decreased by more than 50% to $8.4 billion.

Why have crypto transactions in Nigeria increased?

The fact that Nigeria has had economic crises that have threatened its stability, particularly in the last year, is no longer breaking news. However, according to Chainalysis, some of these difficulties sped up the adoption rate.

The research firm claims that when the local currency (the naira) experienced steep drops, interest in Bitcoin and stablecoins—digital currencies tethered to the dollar to reduce volatility—rose dramatically.

Busha, a Nigerian cryptocurrency exchange co-founded by Moyo Sodipo, said the following to Chainalysis:

“People are constantly looking for ways to protect themselves from the naira’s depreciation and the ongoing economic downturn since COVID.”

Furthermore, Nigeria’s population, particularly the younger generation, which is predominately digital literate, has come to view crypto trading and usage as a means of surviving since the country still struggles with massive unemployment, extreme poverty, and intellectual displacement. adding to the increase.

Platforms for peer-to-peer trade have also been useful in this area. They have made it possible for crypto aficionados to lessen the effects of the banking industry’s restriction on cryptocurrency transactions.

Nigerian crypto regulations

Despite the prohibition put in place by the Central Bank of Nigeria (CBN) in February 2021, cryptocurrency transactions have steadily increased in the nation. Today, there is widespread agreement that removing it might benefit the government and its tech-savvy population significantly.

The lifting of the cryptocurrency restriction can boost Nigeria’s economy. A new path to investment, business, and job development is provided by cryptocurrencies.

Nigerian firms have demonstrated enormous potential in the cryptocurrency and blockchain industries. The government may promote innovation and draw in international investment by enabling this business to thrive, thus boosting the economy of the nation.

The crypto industry may be able to give the Nigerian government additional sources of revenue. The government may make a sizable amount of money by regulating and taxing Bitcoin transactions. This might be used to pay for essential public services and the construction of infrastructure.

The prohibition on cryptocurrency has stifled domestic technological progress. Nigeria can foster a thriving innovation ecosystem by legalizing cryptocurrency businesses. This would not only draw in talent but also promote the creation of blockchain solutions for a range of industries, from agriculture to healthcare.

Even if worries about the potential for cryptocurrencies to be used for illicit purposes still exist, these dangers may be reduced by a well-regulated crypto ecosystem. In order to fully utilize the huge potential that cryptocurrencies offer, the Nigerian government must strike a balance between ensuring financial stability and doing so.

Author

Samson Ayodeji

I am literally obsessed with technology. I love writing about the latest news in technology in different markets, segments and sectors across the world.

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