Twenty-seven per cent of Nigerian Internet users own cryptocurrency data, according to a report by Finder.com
This is despite the Central Bank of Nigeria restriction on digital currencies in the country.
The CBN had in February 2021 directed banks not to allow crypto assets-related transactions in the banking sector.
The apex bank said, “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
However, crypto adoption has continued to grow largely due to Peer-to-Peer transactions. The growth in crypto adoption went up by 21 per cent last year.
According to the report, Men are much more likely to own crypto with 59 per cent of crypto holders being men and 41 per cent being women.
Bitcoin (47 per cent) is the most popular digital asset in the nation, followed by Ethereum (25 per cent).
Cryptocurrency specialist at Finder, James Edwards, said, “We saw huge drops in the price of Bitcoin at the start of May and June which led to declines in crypto ownership in other markets.
“However, looking at Google Trends the search interest for ‘buy Bitcoin’ in Nigeria has actually risen in the past year, suggesting consumers are hoping to buy the dip. This suggests that while some people have sold, others are holding for the long term or may have actually bought cryptocurrency for the first time at what they consider to be a discount.”
According to Edwards, with the recent volatile being witnessed in the crypto sector, investments into the sector isn’t for the faint-hearted. He added that he is surprise at the increasing uptake of the digital asset in the nation despite its recent dip in the market.
A Chainalysis report in 2021 stated that the crypto market in Nigeria and other African countries grew by 1200 per cent in one year. It added that Africa had the third-fastest growing crypto economy in the world.
According to the International Monetary Fund, countries with stable inflation, exchange rates, and credible institutions were highly unlikely to adopt crypto as legal tender.
With the increasing adoption of the digital asset, experts have said there is a need for the CBN to regulate the currency rather than ban it.
Since the beginning of 2021 to June 2022, Nigerians have traded N497.35bn ($1.16bn) worth of Bitcoin on Paxful, a P2P crypto platform.
Commenting on its 2021 trades, the firm stated that Nigeria was its largest country based on trade volume, with over $760m in trade volume, and over six million successful trades.
In an earlier interview with The Aproko Vibes, the Founder/Co-ordinator, Blockchain Nigeria User Group, Chimezie Chuta, said, “Unfortunately, in February 2021, the Central Bank of Nigeria brought out that circular that restricted financial service providers from interacting and dealing with crypto entities. But that did not in any way diminish the adoption of crypto assets in Nigeria.”
He added, “In my opinion, not regulating is a major downside to an economy that wants to shore up income through tax and Foreign Direct Investment. It is counterproductive not to regulate a burgeoning sector like crypto.
“The result is that the nation is losing a lot of money, a lot of revenue that could have come in as VAT. Because if you do not regulate, you cannot tax.”