The cryptocurrency market has gained popularity in Nigeria no thanks to persistent economic headwinds that have pushed family and individual incomes to very low levels. Cryptocurrencies for many, therefore, are the ticket out of poverty.
Adoption in the country has skyrocketed in recent times from $1.3 million recorded in February 2017 to $200 million done in daily transactions, according to one estimate from Timi Ajiboye, CEO of Buycoins, a local cryptocurrency exchange.
A Chainalysis report on the geography of cryptocurrencies also found that Nigeria ranked eight (out of 154 countries) in the 2019-2020 global adoption index. The country ranked first among African countries in peer-to-peer (P2P) payments.
Experts in the industry say the growing awareness is largely due to rising investments in education led by some of the biggest exchanges that provide services in the country.
Luno, for instance, is the first global exchange to physically organise education campaigns in all the geopolitical regions in Nigeria. It has also carried out countless webinars since the pandemic came knocking.
In a recent survey, Luno said it found that 3 out of 5 Nigerians are ready to adopt a global digital currency, reflecting the country’s growing interest in cryptocurrencies since the start of the global pandemic. Nigerians also rank higher than the global average of 37 percent for openness to digital currency adoption.
“We understand that cryptocurrency is a new technology and its important people are very informed that is why we have been focused on education. Before the lockdown, we organised meetups in all geopolitical regions in the country and recorded impressive turnouts as well as virtual webinars where we talked about the basics of cryptocurrency. We also focussed on the tertiary institutions where we had students prepare for what finance will look like when they join the global economy after university and the reception was beyond our expectations across the country,” Owenize Odia, Country Manager, Luno Nigeria told BusinessDay.
The pandemic and the lockdown it engineered has not stopped the drive for education for many of the exchanges. Webinars have now become very common and Odia says that the lockdown did not affect people’s appetite for financial knowledge.
Beyond just educating people to know more about the cryptocurrency market and use cases, education is also to stir them away from proliferating scam activities.
According to Chainalysis, in 2019, criminal activity represented 2.1 percent of all cryptocurrency transaction volume or roughly $21.4 billion worth of transfers. In 2020, the criminal share of all cryptocurrency activity fell to just 0.34 percent or $10.0 billion in transaction volume. One reason the percentage of criminal activity fell is that overall economic activity nearly tripled between 2019 and 2020. The drop may also be as a result of increased access to materials that help people to avoid some of these scams.
“We acknowledge the effect of bad players who have taken advantage of the cryptocurrency space to provide Ponzi schemes which were rife in the past year, this got the attention of many Nigerians who either lost their source of income or were looking for quick ways to improve their finances. This negative turn of events however created an awareness of cryptocurrency and deepened our resolve to educate Nigerians to enable them to avoid these investment pitfalls. The effect of the swift action of the Security and Exchange Commission (SEC) and key bodies like SIBAN as well as various influencers in calling out these bad actors can not be overstated,” Odia said.
