The digital economy has been experiencing a steady rise in crypto technology by young Nigerians and startups, to pay for goods and services.
Nigeria’s Information & communication sector (digital economy) grew by 15.09% in real terms in Q2 2020, compared to the 9.99% growth recorded in Q1 2020 and 9.01% in Q2 2019 amid the disruption caused to the financial markets by the pandemic.
In Q1 2020, Bitfxt – a fast-growing Nigerian crypto-trading company, raised $15 million Series A funding for the expansion of its operations, which created more jobs and investments in an economy in dire need of cash inflows.
The Lagos-based crypto startup permits consumers to buy and sell cryptos. Such macro shows how fast Nigerians are tapping into crypto technology, which in turn is boosting Nigeria’s economy.
Otatade Happy, a Paxful Peer, in an exclusive interview with Nairametrics, spoke on how the prevailing crypto evolution can further boost the Nigerian economy, with regards to payments and transactions.
“We know how difficult it is to send money from Nigeria to other countries but with crypto, payment can be made instantly without the hassles of queueing in the bank. I can also get money from abroad without stress.
“The fee to transfer crypto from one wallet to another is really small. Because of that, many people are adopting crypto in Nigeria and the older generation will soon accept it.”
Unsurprisingly, a significant number of young Nigerians have started utilizing cryptos, in a bid to avoid the numerous challenges faced with the traditional money transfer services, such as high costs and slow speed, amongst others.
The crypto evolution prevailing in Nigeria’s economy is already printing successful startups based on reports that a Nigerian-based cryptocurrency exchange startup, Yellow Card, raised $1.5million in seed capital from the popular American venture capital firm, Andreessen Horowitz, and a fast-growing crypto hedge fund, Polychain – to push its reach across Africa’s vibrant crypto market.
Raymond Asogwa, an Ambassador for Paxful and Power trader, spoke on the edge crypto brings to the Nigerian economy.
He said, “Crypto has given a lot of opportunities and a new niche that the Nigerian labor force can leverage on. The Nigerian tech industry is booming due to the exposure to blockchain technology.”
In an explanatory note to Nairametrics, Ekene Ojieh, Head of Public Relations and Corporate Strategy at Buffalo Chase – a crypto analytic firm, gave key insights on how some Nigerians use cryptocurrency for wealth preservation.
“Nigerians use bitcoin not just as a store of value but also as an investment. In the last 30days, bitcoin has made over 28%. Its accessibility enables anyone to send and receive bitcoin from any part of the world, unlike getting US dollars for international transactions.
“It is worthy to note that bitcoin is still a volatile asset. The upside of this is that, one can make a significant amount of profit in a short time frame,” said Ojieh.
Recently, a Nigerian female rights group known as Feminist Coalition, used the power of crypto to push for police reforms during the #EndSARS protests. The group used crypto technology to receive funds and provide the needed financial support for protesters in Lagos, Abuja, Port Harcourt, amongst others, as well as to foot the medical bills of some injured protesters.
The group resorted to accepting only Bitcoin donations – using BTC Pay, after an embargo was allegedly placed on its transactions by the Central Bank of Nigeria (CBN). BTC Pay is a free, secure, decentralized, and censorship-resistant platform.
A significant number of Nigerians and startups are quickly adapting to arguably the most disruptive technology ever invented – Crypto. Consequently, the increased usage of crypto is pushing Nigeria’s economic growth at a time when the COVID-19 pandemic has adversely affected Nigeria’s export earning product – Crude oil.
A few months ago, the Nigerian Securities and Exchange Commission (SEC), proposed a new set of rules aimed at regulating Crypto-tokens or Crypto-coin investments, when the character of an investment qualifies as securities transactions. This further highlights the importance of crypto to the Nigerian economy.