Hanu is the Founder/ceo of Patricia, an e-commerce and digital securities trading platform he founded in his University of PortHarcourt dorm room in 2017. In this interview, He reviews the year in cryptocurrencies, its adoption in Nigeria, and shares his outlook for 2021.
What have been the highlights of the year in crypto?
Hanu Agbodje: It keeps getting better for crypto. 2020 was a special year for crypto. Rising concerns over devaluation of major currencies in the wake of massive money printing by central banks to reflate economies in the wake COVID-19, surge in the of cryptos for cross-border payments including remittances, more constructive engagement by governments on the future of crypto in the payments ecosystem, and rising institutional money manager interest all played a big part in pushing it to historic highs by year end. In December, Bitcoin passed the $25,000 mark. Early adopters can only be excited with the decision they have made. For those still doubting, now is a good time to rethink their biases.
Read Also: Crypto Trading Bots – The future of Bitcoin Trading.
It’s a good thing you mention Bitcoin’s rally. Some are already calling it the “new gold”. Isolating the occasional corrections that could happen along the way, do you think we are about to witness an unprecedented bull run in Bitcoin prices?
Absolutely. The basic law of economics will apply here. As adoption spreads, demand will keep driving up the price of Bitcoin, which by the way is not the only cryptocurrency. As more economies adopt the use of crypto currency, the demand for it is only going to increase which would only mean that the gains it is making are only just beginning. Many of the biggest fund managers in London, New York, Tokyo and elsewhere are piling into the asset. The merits of Bitcoin and other leading cryptos as a store of value are undeniable. The world is currently experiencing a culture shift especially in commerce and payment, and Bitcoin will be a big beneficiary.
“Government plays a key role in terms of influencing the adoption process amongst the populace. Being that crypto is still in its infancy stage in our emerging economy, it would be healthy if the regulations are not market stifling or excessively “
Various international reports mark out Nigeria as the crypto capital of Africa. Yet there are tens of millions of educated Nigerians who have never traded it, or used it. This points to the fact that there is still a long way to go. In Patricia’s experience, what are the biggest challenges facing wider crypto adoption in Nigeria?
You are right that Nigeria has claimed the top spot as the epicentre of crypto in Africa. But we have only just scratched the surface. There is still so much work to be done. Some of the challenges we need to overcome are education and enlightenment, government support, exposure of quack crypto operators, and through platforms like Businessday conferences, the hosting of public conversations and fireside chats that spread awareness about the asset class. Presently, a lot of the attention is on peer-to-peer trading. There is a lot more that cryptocurrencies, and blockchain, the underlying technology, can do for Nigeria.
You speak on the role of government as an important enabler of crypto. In Nigeria, the Central Bank of Nigeria, Securities & Exchange Commission, and the Federal Ministry of Communications & Digital Economy have weighed in on how cryptocurrencies should be regulated. With that much impending overlapping regulatory oversight in Nigeria do you think there is a risk of over-supervision killing local innovation, stifling the ecosystem, and generally stunting adoption?
Government plays a key role in terms of influencing the adoption process amongst the populace. Being that crypto is still in its infancy stage in our emerging economy, it would be healthy if the regulations are not market stifling or excessively burdensome. The obvious way to get it right would be through extensive consultations with stakeholders and crypto businesses before the regulations come to light.
In 2020, a lot of people moved into cryptocurrencies as a store of value and in pursuit of financial gains. In reality, many of them have only a faint understanding of its fundamentals. Do you worry that the pace of crowding into crypto could blow up a bubble, which if and when it pops could significantly damage its appeal in the longer-term?
Yes, it is important that they fully understand the ropes from stakeholders who have been in this. The only thing worse than no adoption is hasty adoption that backfires when people are defrauded, or take on financial positions that they do not understand the risks of. As with every portfolio allocation, my advice is before you jump in or out, speak to an expert.
In a recent video titled “What’s Ahead,” Steve Forbes, publisher of Forbes magazine, came down hard of Bitcoin. He dismissed the idea that Bitcoin is the new gold. In his words, it “remains too volatile,” and that a supply cap of 21 million on Bitcoin supply will “severely hinder its future usefulness.” His view represents a common one among many influential voices. Now do you think that other crypto alternatives like Ethereum – that has gained over 300% this year alone – that offer far greater supply expansion over Bitcoin’s restriction address Forbes concerns and are the future of blockchain payments?
With all due respect to Mr. Forbes, it is unfair to attribute the measured price undulations of gold, a 4,000-year-old asset to Bitcoin, which was created in 2009. Let’s be very clear. Crypto is a holistic term. People have been writing Bitcoin off for years yet it keeps getting stronger. Also, other cryptos like Ethereum are on the rise in terms of adoption. In a holistic sense, this would boost the entire crypto space. As for threats, I think a more side-by-side approach of co-existing cryptocurrencies is what the future would look like.
A much-talked about innovation your company launched this year was the Patricia Card. What has the market reception been like?
The reception has been great to be honest. Effort shows and genius hardly hides. Even with the pandemic, and subsequent lockdown, our customers kept requesting for the Patricia bitcoin debit card. With being able to spend bitcoin directly, there are certainly more options to spend for anyone who has the Patricia Debit card. All over the country, we have delivered the debit card and we expect the numbers to surge even more in 2021.
Since its launch, a few competitors have also entered the market, giving the market more choice. What makes the Patricia card stand out from the rest?
At Patricia, we welcome the competition.
Seriously. Imitators and innovators are welcome to join the space. Let the market make its choice. The Patricia card offers far more in terms of giving the users greater options. If you don’t have Bitcoin but you have funds in your Naira wallet, the Patricia debit card works for you. You have Bitcoin in your wallet but no Naira, the Patricia card works. If you want to pay for that subscription, or bill online, the Patricia card has got your back.
What our engineering team has done is to marry the daily life of Nigerians to Bitcoin in a seamless way. That is truly special.
Let’s segue to anonymity concerns. There is an impression that Bitcoin presents an opportunity for money launderers and tax evaders to get their hands-on Bitcoin and to squirrel away a lot of funds behind the tax authority’s back. Do you agree?
The traditional banks are anonymous too in that sense. I am pretty sure that more people are evading taxes through banks than blockchain. Fraud perpetrated through the financial system has been with us for a long time, way before Blockchain and Bitcoin came on the scene. Besides, the idea that Bitcoin is completely anonymous is a misconception. There are always measures put in by the wallets and bitcoin companies to curb fraudulent activities. Just like our traditional banks, it is a never-ending KYC process. Institutional and platforms ate continuously improving processes to enhance security of funds and prevent fraudulent practices.
Earlier you pointed out that Blockchain has a lot more to offer Nigeria than simply P2P Bitcoin trading. The most often cited low-hanging fruits are peer-to-peer energy trading, digital claims to land ownership, tracing agricultural goods along supply chains and trade facilitation. What are your views on this?
Blockchain has proven very useful in crypto payments. Now developed economies are applying it in more far-reaching ways, some of which you have pointed out. This is clearly the brave, new path we would like to see in Nigeria. Blockchain has the potential to leapfrog Nigeria’s development like the entry of GSM did at the start of the new millennium. Here is the thing: as blockchain touches more sectors, it increases public trust for crypto in particular as it is the crusader for blockchain technology would. A wider use of blockchain in the future is almost certain and the benefits are huge for all. I can’t wait.
You’ve gone on record to say that the transition to crypto will be a gradual process requiring bridge-building between the traditional and digital currencies’ galaxies. From a competition perspective, what if the CBN gives traditional banks the green light to offer crypto services to customers, do you see a risk that they will swamp out players like you?
The bigger the market, the greater the possibility for a larger market share. We are ready to play ball. We have been doing this a while and we know what the market looks like. We would welcome the banks into the space. Together we can even work together to increase the general adoption for Nigeria and Africa. We are ready for the future.
As we start a new year, what advice would you give?
First, buy crypto. Get a piece of the future, now. The adoption will be more than double what it was in 2020. Second, support the local crypto platforms and service providers. They will hold your hand through the process of understanding crypto better. Third, educate yourself on crypto. Knowledge is power.
