Cryptocurrency adoption continues to grow across the world and particularly, in Nigeria. But aside from unreliable evidence, there haven’t been many objective measures of how rates of adoption and usage patterns differ around the world.
You won’t be shocked by the level of acceptance and usage of cryptocurrencies in Nigeria. Although Nigeria may not be the first country to mention when discussing crypto in Africa. Nigeria has proved to be a fertile ground for advancing the blockchain revolution.
According to Paxful, Bitcoin and some other stable cryptos are nothing new to many Nigerian. It is estimated that Nigeria trades over $4 million in cryptocurrencies weekly. If I am to put shit coins into consideration, then the figure may seem much larger.
Nigeria’s approach to cryptocurrency regulation has been mixed. A “wait and see” direction has greatly hindered the growth of cryptocurrency adoption in Nigeria.
The government has issued warnings about the volatile nature of cryptocurrencies in the past, but it has not issued concrete laws that fully cater to the pressing needs of the cryptocurrency industry.
Fintechs has, for a long time, been at the receiving end of unfavorable government laws and regulations in Nigeria.
An example of the government’s oppressive treatment of fintechs in Nigeria is highlighted by its proposed licensing scheme for the increment of the minimum investor funds for fin-tech companies to as much as $15 million.
Policies such as these could prevent most firms from joining the crypto markets if made applicable. Regulatory costs typically increase with the enforcement of such policies. Such costs may be passed on to customers.
This is a policy that could, if implemented, limit the entrance of many firms into the crypto markets. Consumers of cryptocurrencies in Africa may, therefore, be impacted by higher service costs.
Blockchain Foray into Regulatory Technology
Again, the shadow economy could prove to be too large for regulators to limit cryptocurrencies ‘ eventual mass adoption. In Nigeria, there is a shadow economy in food markets, clothing markets, and other industries where it is impossible to formally ascertain the measure of economic activity.
The decentralized nature of blockchain and cryptocurrencies is such that it is almost impossible if not impossible for a regulator to have full oversight. Even in formal economies, regulation of the financial system is never fully successful. To this end, it is clear that insurance against fraud and lack of transparency is the blockchain itself. This is why so many more people continue to adopt cryptocurrencies in Africa.