Globally, Nigeria’s blockchain ecosystem has evolved to be one of the most active in the world. Nigeria is currently the second largest bitcoin market, behind the United States. From a community of only a few enthusiastic “blockchain evangelists,” the Nigerian blockchain community has grown into a coalition of several blockchain-centric organizations who are actively leveraging blockchain to advance the country’s economic state.
In this year, 2021, the Nigerian blockchain ecosystem will definitely experience significant growth and development. This development will be impossible without the contribution of the active players that are contributing to the growth of blockchain in Nigeria, through crypto exchanges, blockchain education, crypto payment apps, and many more. In mapping out the journey of blockchain in Nigeria for 2021, it is important to explore the activities of some of the organizations and companies that are connecting the dots for blockchain in the country.
This article features a brief descriptive overview of the activities of some blockchain-powered startups in Nigeria under different niches like crypto exchanges, supply chain and logistics, crypto payment gateways, etc.
Regulatory Bodies and Relevant Blockchain Associations
The evolution of cryptocurrencies in Nigeria, over the past few years, has emphasized the need for strong regulatory and institutional backing, for a technology like blockchain to scale. In Nigeria, a few organizations exist to provide support for the growth of the blockchain ecosystem, and also influence the development of favourable policies and regulations.
- Blockchain Industry Association of Nigeria (BIAN)
Starting off as Nigeria Blockchain Alliance (NBA) initiative in 2017, before being incorporated as BIAN by the Cryptography Development Initiative of Nigeria (CDIN), BIAN is focused on advancing blockchain industry standards, adherence to regulations, anti-fraud activities, and other efforts that will help develop and sustain the Nigerian blockchain ecosystem.
- Blockchain Nigeria User Group
The Blockchain Nigeria User Group was founded in 2016 by Chuta Chimezie, to develop sufficient Nigerian blockchain talents that are capable of creating blockchain solutions to address global challenges. The platform has positioned itself as a blockchain evangelist, spreading the knowledge of Nigeria through its events and training.
- Stakeholders in Blockchain Association of Nigeria(SIBAN)
Knowing fully well the implication of having proper regulations in the blockchain industry, SIBAN was created to serve as a self regulatory body, providing regulations to guide blockchain activities in the country.
In Nigeria, cryptocurrency exchanges are about the most common type of venture in the blockchain industry. Cryptocurrency exchange platforms constitute an integral part of Nigeria’s budding blockchain ecosystem. With a growing interest in cryptocurrencies, the Nigerian market is flooded with a plethora of crypto exchange platforms including BuyCoins, SabiExchange, Bitfxt, NaijaCrypto, Patricia, Chiji14xchange, Quidax Yellowcard, Coinprofile, Busha and coinbarter.
SabiExchange currently supports investment and trading of over 100 digital asset pairs. With SabiExchange, users can enjoy advanced financial services.
YC-backed platform, BuyCoins, also supports cryptocurrency exchanges, but is limited to the buying and selling of Litecoin, Ethereum, Bitcoin and USDC. However, with innovation ingrained in the company’s product, the company has been able to satisfy the needs of its users through its offerings. In 2020, BuyCoins processed transactions worth over $141 million.
Patricia offers a unique product that makes buying, selling and using cryptocurrencies in Nigeria extremely easy. The platform has over 300,000 users who use the Patricia platform to meet their everyday needs. With Patrica, it is extremely easy to make use of bitcoin to pay bills, purchase airtime and buy data.
Other cryptocurrency exchange platforms in Nigeria are also contributing significantly to the advancement of cryptocurrency adoption in the country, and are pivotal to the journey of blockchain in Nigeria in 2021.
Crypto Social Payment Apps
The companies under this category are the Nigerian-based blockchain-powered companies who are facilitating payment for Nigerians through the use of cryptocurrencies.
Key players in this space include Bundle Africa, Bitsika and the flux app by Blueloop.
Bundle Africa just launched in April 2020 and, since then, has grown to be one of the most used cryptocurrency payment apps in Nigeria, with a user base of over 30,000 people. The Bundle app makes it easy for anyone, anywhere, to send and receive cash and crypto instantly. Bundle’s vision is to become an indispensable product, whilst expanding cryptocurrency adoption in Africa, through its innovative product offerings.
Bitsika is another Ghana-Nigerian crypto social payment app which positions itself to be the cash app of Africa. Whilst the Bitsika app facilitates easy payment through the use of cryptocurrencies, it also facilitates cross-border remittance with zero transaction fees, which is especially useful in Africa where cross-border remittance fees are ridiculously high.
Late last year, Nigerian Fintech startup, Blueloop, raised $77,000 in pre-seed funding as it planned to roll out a mobile crypto-based payment platform named Flux. The flux platform allows anyone to receive and send money to anyone in any part of the world, convert the money into cash, and also spend it within their local region through their flux wallets. The flux app is one of the crypto payment apps that we expect to shape the face of cryptocurrencies in Nigeria for the year 2021.
Crypto Payment Gateways
The Nigerian fintech industry has witnessed the introduction of amazing payment gateways. Not until recently, all of these payment gateways excluded cryptocurrencies. But now, Nigeria can boast of quite a number of cryptocurrency payment gateways that allow individuals and businesses to accept transactions and payments in cryptocurrencies.
Some of the organizations that provide crypto payment gateways in Nigeria include:
Supply chain & Logistics/Real Estate
Blockchain-powered products in real estate and supply chain & logistics, within Nigeria, are not as abundant as they are for fintech. Nonetheless, we still have some disruptive companies that are harnessing blockchain to transform the real estate industry, as well as supply chain and logistics in Nigeria. Examples of such disruptive companies include House Africa and AgricChainx.
House Africa is Africa’s first blockchain-based property registry. House Africa leverages blockchain technology to authenticate property ownership and verify the integrity of land titles. This solution is made available to users through their PropVat product.
AgricChainx, on the other hand, is a blockchain-based solution for agricultural supply chain and logistics. Their AgricChain solution helps in monitoring and tracking crops from the time of harvest till the time they are received by consumers or retailers. The company is also developing products for supply chain management for agricultural produce.
Blockchain Education/Incubator program
This category comprises organizations and initiatives that are actively involved in raising blockchain awareness and educating people about how to leverage blockchain, as a transformative tool, in Nigeria. Examples of such organizations and initiatives in Nigeria include Africa Blockchain Developers Call (Abdcseries), BlockchainDev1000, eWealth Atlantic, Blockchain African Ladies, Crypto Masterclass and Africa Blockchain Developers call.
Each of these initiatives contribute immensely to the growth of blockchain in Nigeria. BlockchainDev1000 is an initiative of the Blockchain Nigeria User Group, and it was created to raise at least 1000 blockchain talents in Nigeria. eWealth Atlantic is also focused on providing a platform to educate and train Nigerians on cryptocurrencies and blockchain technology, in their quest to help Nigerians maximize wealth.
Blockchain African ladies is a non-profit initiative that unites African ladies through blockchain education. A platform like this is critical to ensuring gender inclusion within the blockchain industry.
While Xend Finance provides a DeFi platform for credit unions and cooperatives, Cryptocurrency Market provides comprehensive analysis of the cryptocurrency market, claiming to “concentrate on centralizing information on a decentralized platform which will in turn save both time and money.”
Beep Magnet, however, was created by blockchain enthusiasts to unite their common interest and advance the development of blockchain-driven solutions.
Of course, the blockchain industry in Nigeria and its activities would not have attracted as much visibility as it has if not for the media and how they have shed light on the activities of the industry. Media organizations helping Nigeria’s blockchain industry achieve more visibility include:
- Crypto TV plus
- Decentralize Africa
This category features organizations that provide legal expertise and professional consultancy services to enhance the growth and progress of blockchain projects and activities in Nigeria. Key players in this niche include Lex Futurus, Future-Proof Intelligence (FINT) and A&D Forensics.
Lex Futurus offers professional expertise on legal advisory, training and consultancy services for blockchain and Distributed Ledger Technology (DLT).
A&D Forensics assists their clients with insights on blockchain technology, how cryptocurrencies and blockchain can help their ventures stay on top. They also train their clients on how to use blockchain industry-leading tools and very importantly, they enforce compliance with regulations and industry best practices.
The Journey Ahead For Nigeria’s Blockchain Industry in 2021
2021 promises to be an amazing year for the Nigerian blockchain industry, considering the milestones the industry recorded in the past year and the breakthroughs in regulations and adoption. The overall success and growth of the Nigerian blockchain industry in 2021 will, indeed, be more than that of previous years. This is, however, the case, because of the promising potential of the different organizations and initiatives, some of which are featured in this article, which are shaping the face of the blockchain industry in Nigeria. The map of blockchain in Nigeria for this year will feature a lot of more exciting blockchain-based innovations from many of these changemakers that constitute the Nigerian blockchain industry.
Editor’s Note: There are probably more crypto/blockchain-based Nigerian startups/organisation. The list keep growing every day. These are the ones we’ve curated so far.
If you know of any crypto/blockchain-based startups/organisation not included in this article. Please kindly drop their names in the comment box. We will continue to update the list.
The rise of CBDC in African economies
Many nations have taken cues from the world of crypto and its resounding successes over the last decade. In order to avoid getting left behind, governments worldwide are increasingly turning their attention towards implementing some form of digital currency, a CBDC which in full is Central Bank Digital Currency. Although inspired by cryptocurrencies, CBDC’s are quite different from traditional crypto platforms. The main differences are that CBDC’s are unlikely to be decentralized, the supply of this currency regulated by the host’s country’s central bank as the CBDC is designed to operate as a sovereign legal tender, the digitized form of the host country’s fiat currency. Thus, a central bank may issue digitized tokens of its currency of which their value is pegged to the fiat currency of the nation in question, making CBDC’s stablecoins.
Africa has seen a rise in the use of cryptocurrencies and it’s still pushing frontiers in this sector. Although the use of crypto in many African nations is becoming more and more pervasive by the day, the tone of governments in many of these countries toward the sector is cautious at best and threatening at worst. However, a few nations have voiced interests in creating digitized versions of their legal tender to function as a CBDC. Amongst these are Ghana, Nigeria, Morocco, Kenya and Tunisia.
Many of these projects are still in the research phase or developmental phase however. A good example is Ghana’s proposed CBDC, the E-cedi being developed in partnership with German company, Giesecke + Devrient. Nigeria’s CBDC project, the eNaira has been announced and according to Nigeria’s central bank, this CBDC will be launched sometime in 2021. To that end, the CBN has partnered with fintech company, Bitt Inc. to serve as the technical partner in the eNaira’s development. Reportedly, the CBN had made the decision to digitize the Nigerian Naira in 2017.
While the pursuance of digital currencies in African nations is a welcome development, implementation of these schemes isn’t without challenges. Chief among the issues countries in Africa face would be the already existing financial service inequality and poor penetration of internet access in the continent. These challenges must be tackled in order to allow for mainstream adoption of CBDCs and the subsequent provision of financial inclusion. The benefits largely depend on the peculiarities of the nation deploying them. For instance, a digital currency is thought to help Nigeria increase foreign remittances, it’s second largest source of forex after oil. Whatever the outcome of these projects, it is becoming apparent that CBDC’s have come to stay.
Why the Nigerian Government is Panicking About Bitcoin
Fear, social media clamour, open outrage amongst citizens and vivid apprehension of the outcome of what the ban on crypto means for traders and investors as well as fintech companies. To some, it was a welcome development aimed at driving the ship of the country towards a better shore. To others, it was another rule by the Nigerian government to clamp down on technology. On February 5, 2021, the Central Bank of Nigeria issued a circular directing all commercial banks to close the accounts that are connected to cryptocurrency platforms. This was later given further clarification in a 5-paged article stating a plethora of reasons why it is not advisable to trade cryptocurrency. The article explained that the ban does not mean that Nigerians can no longer trade cryptocurrency. However, it is a measure to dissociate commercial banks from all forms of crypto trading which are considered wrong.
CBN’s reasons for banning cryptocurrency
The 5-paged article was released 2 days after the crypto ban. It explains why it is inadvisable to trade cryptocurrency and the justification behind the orders of the CBN. Rather than give a fair definition of cryptocurrency, CBN focused on the partial lapses of the currency in explaining its meaning. In the explanatory article, cryptocurrency was defined as “digital or virtual currencies issued by largely anonymous entities and secured by cryptography. Cryptography is a method of encrypting and hiding codes that prevent oversight, accountability, and regulation.”
While explaining the rationale behind the ban, the circular reiterates that Nigeria is not the first country to place restrictions on cryptocurrency. Countries like China, Canada, Taiwan, Indonesia, Algeria, Egypt, Morocco, Bolivia, Kyrgyzstan, Ecuador, Saudi Arabia, Jordan, Iran, Bangladesh, Nepal and Cambodia have placed certain restrictions on the trading of cryptocurrency. Quoting various instances where cryptocurrencies have been derided by various persons and institutions without reference to cases where Bitcoin has been praised by reputable investors and institutions. In the latter instance, Bitcoin was referred to as the new gold.
One of the reasons behind the ban is that the cryptocurrencies are issued by unregulated or unlicensed persons which contravenes the CBN Act of 2007. Also, its anonymity and decentralization quality show that “its patrons and users value anonymity, obscurity, and concealment”. The CBN explained that there would be no need for such concealment if the activities of users were legal. Nevertheless, the CBN forgot that apart from using crypto for transactions, it can also be used as a store of value.
Lack of centralization and the accompanying issues of anonymity are the predominant reasons stated by the CBN before its ban on cryptocurrency.
You may wonder why the CBN waited till 2021 to place a ban on crypto despite its popularity since 2010. This reason is not far-fetched as it explains the true reason behind February directives on cryptocurrency.
Hidden reasons behind the ban on cryptocurrency
Few months after the directives were issued to commercial banks in Nigeria, Chainalysis, a blockchain research firm, issued a report that the volume of a dollar received from crypto users in Nigeria has grown between 2020-2021. In May, Nigeria received $2.4 billion worth of crypto compared to $684 million received in December 2020. The increase occurred after the clampdown on crypto by the central bank. This shows that CBN orders have little or no effect on cryptocurrency trading.
Last October marked an important turning point in the history of Nigeria. It marked a month of consciousness amongst the youths, protest rocks every state in Nigeria against police brutality and an end to the Sars police unit under the hashtag #Endsars. The protest was the first of its kind after more than a decade. During the EndSars protest, various groups sprang up to receive donations for demonstrators to provide them with first aid, food and security. The accounts of these groups were suspended which led one of such groups, Feminist Coalition to start receiving Bitcoin for donations due to its decentralization. About $150,000 worth of Bitcoin was received which was used to support EndSars protesters.
Jack Dorsey, Founder/CEO of Twitter reshared the FemCo Bitcoin donation page with the caption “donate via bitcoin to help EndSars”. His actions might have explained the ban on Twitter by the Nigerian government. The use of cryptocurrency to fuel such protests is the main unstated reason behind the recent ban.
In conclusion, the Nigerian government may pretend that the clampdown on cryptocurrency is a result of its lapses usually quoted by various countries as reasons behind restrictions. However, the activities of the Nigerian government is the fear of the inability to control the currency. It is gradually becoming the action of the current government to restrict whatever it can not control.
How Demographic Trends are Pushing Cryptocurrencies Adoption in Africa
The African crypto market has seen a tremendous boom in the last few years. Driving this growth are a myriad of factors among which are economic inequality, volatile fiat currencies, low financial inclusion as well as high unemployment rates. These drivers of market growth are also greatly intertwined with Africa’s unique demographics which entail the distribution and categorization of the population.
The goal or aim of many cryptocurrency projects and the movement of the community in general is to get to a point where they’re widely used and accepted by individuals, corporations and governments. This implies mainstream adoption, much like the pervasive nature of mobile banking today. Africa presents unique opportunities owing not just to the socioeconomic clime but it’s demographics as well.
For cryptocurrencies to achieve mainstream adoption, they would have to in a sense become the norm and be widely accepted and recognized by virtually all corners of society, much like Facebook is in the social media world. In Africa, despite the size of the crypto market, cryptocurrencies are still a good distance away from what one would describe as popular acceptance. The sector is growing no doubt, however, that growth is reflective of Africa’s unique demographics and population scene.
It is without question that the African continent is the youngest, in terms of median age at 19.7 years. There are about 600 million people aged between 15 and 45 in Africa, representing nearly half of Africa’s population. Many nations, especially in Sub-Saharan Africa are in stage 2 of the demographic transition (high birth rates and high death rates – relatively low life expectancy) which is representative of the economic climes of these nations. A report found that around 13 million young Africans enter the labour market each year against 3.7 million jobs, most created by the informal sector. Therefore many African youth are laden with economic difficulties at that important time in their lives.
However, Africa’s young population, generally speaking, has a greater proclivity for being more open minded to technology adoption. Education and literacy has played a role in this with Africa’s literacy rate at around 70%. While not comparable to that of other continents, this rate is driven greatly by the large young population Africa boasts of. In any case, seeing the economic conditions of many African countries, and a tendency for young people to adopt and/or trust new technologies better and faster than other age groups gives some explanation to how quickly the crypto market is growing on the continent. As the years go by, the level of adoption would inevitably continue to increase as the current youth population expands till it gets to the point where blockchain becomes so pervasive that it achieves the necessary trust and acceptance to become mainstream.
Right now, in some African nations, that line is being crossed already with central digital currencies in development.
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