Emmanuel Babalola is the Director for Africa at Binance, a leading global cryptocurrency exchange platform, driving crypto adoption on the continent. In this interview with BusinessDay’s Endurance Okafor, he shares insight on how the recent rise in the popularity of blockchain technology in Nigeria is helping to reduce unemployment and the role Binance is playing in deepening the adoption of cryptocurrency in Africa. Excerpts:
Even though cryptocurrency has been around for much longer with the first digital token, Bitcoin, founded in 2009, it has recently become one of the most common words on the lips of everyone. Why is that so?
Bitcoin, the first cryptocurrency was actually founded in 2008 – which was when the Bitcoin white paper was released.
In terms of why crypto adoption is increasing, let’s look at the various use cases for crypto and their importance. Primarily how crypto innovates the way Africans make payments whether it is remittances, cross-border transfers, settlements and so on. The world is more connected than ever, people and businesses can operate across country lines. Current traditional banking can be limited in terms of how long transactions take, how much it costs and the difficulties of exchanging currencies. Crypto simplifies all this. Making it easier for people to make payments in a fraction of the time.
There are also many other use cases such as crypto as a store of value, as a hedge against currency devaluation i.e., use of stablecoins as a saving asset and holding coins like Bitcoin as an investment (e.g., like gold).
As the future of money, the prospects of potentially life-changing technology is exciting. People can now build and access systems not previously available to them.
Additionally, a major benefit of the decentralised model of cryptocurrency is putting power back in the hands of users. Cryptocurrencies were designed as an alternative to traditional finance and therefore don’t have a single point of failure, making them more resilient, efficient, and democratic. With more emphasis on these advantages through the media, blockchain popularity is inevitable.
The recent rise in the popularity of cryptocurrency is also being witnessed in Nigeria. What is your take on the current state of blockchain technology in the country?
Across Africa, currency devaluation, low uptake of traditional bank accounts and high unemployment are forcing people to find inventive, non-traditional ways of making money. Nigeria also struggles with the same economic issues. As such, cryptocurrencies offer a way to go directly to the future of finance, which is very necessary for Nigeria. The technology behind bitcoin, blockchain is also being looked into keenly both by the government, regulators and banks because it holds multiple applications in e-governance, agriculture, manufacturing etc. To demonstrate this, NITDA and the Ministry of Communication and Digital Economy not too long ago released a draft National Blockchain strategy (which myself and other stakeholders contributed to drafting).
Furthermore, the blockchain industry is creating new job opportunities for Nigerians – and many are being brought out of poverty and learning skills online to remain employable globally. While it’s still very early days, Nigerians are adopting major technological innovations and will compete even better globally as this continues.
What role is Binance playing in the growth of blockchain technology and cryptocurrency in Nigeria?
Binance continues to build core facets of the blockchain ecosystem, bringing new services and financial opportunities to people around the world – and this includes Nigeria. Binance is committed to ensuring that more and more Nigerians have access to the right information about the workings of the ecosystem and are provided with adequate resources and tools to learn, build, and scale. Binance is also committed to supporting the African developer community which will subsequently lead to even more development.
What are some of the initiatives by Binance that is helping to deepen cryptocurrency adoption in Africa’s largest economy?
Our education initiatives have been instrumental in deepening cryptocurrency adoption in Africa. Binance rolled out the Binance Masterclass programmes across the continent to teach Africans the fundamentals of cryptocurrencies, how to identify scams and safeguard their crypto journey. The lessons are free to join and open to everyone.
By the end of 2020, the Masterclass had helped educate over 70,000 Africans in just one year since its debut. Efforts have since doubled, providing educational resources to over 350,000 Africans in 2021 – 177,000 Africans in Q1 2021 and over 179,500 in Q2 2021, creating the educational infrastructure that Africans need to be financially free and informed.
In addition to training crypto users, Binance is equipping blockchain developers with the necessary skills to build solutions. For example, we hosted an eight-week masterclass where 1000 blockchain developers in Africa were trained in key skills. The participants also took part in a live demo showcasing newly built blockchain-based products in action, including staking and farming projects, algorithm-based stablecoins, automated market makers, insurance projects amongst other things.
Read also: Nigeria targets 95% digital literacy by 2030
Do you agree with the notion that blockchain technology is a vital channel for wealth creation? If yes/ no, why?
Yes, I do. Beyond investing in cryptocurrencies, new systems are being built and new financial structures are emerging – all using blockchain technology, to serve the next billion people.
As the most open and inclusive system, blockchain allows users to gain access without prerequisites or qualifications. As such, more and more people who would otherwise not have such opportunities are being empowered to create wealth.
What are some of the challenges that may daunt the growth and development of blockchain technology in Nigeria?
Some challenges include users being frightened by technical jargon as well as susceptibility to scams. Our top priority is user safety, and therefore we kicked off our education initiative – to teach crypto fundamentals, explain everyday use cases and ensure users know how to avoid scams. We also kicked off a campaign called My Crypto Life, an initiative that spotlights incredible crypto stories from people around the world, showing how crypto can be used by everyday people.
Crypto trading is perceived as a high-risk venture due to its volatile nature. What’s your take on this?
With any investment or asset, proper research needs to be done to understand the risks and benefits. While some cryptocurrencies can be highly volatile (there are exceptions i.e., stablecoins), cryptocurrencies and their underlying blockchain technology can be utilised in almost every area of life and as such, many will continue to up-trend in the long term.
Crypto is also a safety net for Africans as the ability to transact on an immutable, censorship-resistant and permissionless blockchain that cannot be affected by the hyperinflation seen so often in African economies is a huge step towards achieving self-sovereignty over their finances.
There are topical issues around the importance of regulation and compliance. What is your take on Nigeria’s current regulatory position about cryptocurrency usage and adoption?
Crypto and even the regulation of crypto are such new concepts – just over a decade of existence. As such many crypto stakeholders, including Binance, were self-regulating through KYC/AML policies when there was little clarity from regulators.
Now, as regulators have shown an interest in the space, I believe regulatory collaboration with key stakeholders in the blockchain ecosystem is essential. We at Binance are actively keeping abreast of ever-changing policies in the crypto industry and continue to take a collaborative approach in working with regulators. Together we can find the optimal way to set a fair playing field as consumer protection is important to all of us.
What lessons can Nigeria learn from other markets with a more developed blockchain ecosystem?
Nigeria can learn to establish a continued collaboration with industry stakeholders and involving us in policy formation.
It is safe to say the growth in blockchain technology and cryptocurrency adoption comes with issues around crypto-related crimes. How do you think industry players like yourself can navigate such challenges?
In 2019, crypto-related crimes accounted for less than 2 percent of all crypto transactions and this percentage fell to 0.34% in 2020, according to Chainalysis.
However, for that 0.34 percent, education is one of the biggest ways to tackle this. Through our initiatives, we consistently ensure users and potential users are educated and armed against nefarious platforms and individuals.
In addition, Binance recently expanded its global KYC requirements to enhance user protections and provide a safe crypto environment for everyone and consistently implements new P2P features to prevent bad actors from exploiting the system.
What is your outlook for the blockchain ecosystem in Nigeria?
Greater blockchain adoption is opening the gateway to more opportunities for many businesses to develop even more blockchain-based applications and create more job opportunities. I think the future of Nigeria will be much brighter for it.
