Nigeria, the largest economy in Africa, has been unable to efficiently tackle its increasing unemployment rate – a ticking time bomb, if not addressed quickly. In 2020, the frontier market witnessed a rise in its unemployment rate, due to an ever-growing dependent population, reduction in the total output of goods and services, and the unprecedented COVID-19 pandemic, which negatively impacted the economy and led to job loss for thousands of Nigerians.
Data from the National Bureau of Statistics (NBS) revealed that:
- Nigeria’s unemployment rate as at 2020 Q2 reached 27.1% — indicating that about 21,764,614 (21.7 million) Nigerians are unemployed.
- Also, 13.9 million Nigerian youths are unemployed.
- Youths between 15-24 years constituted the highest unemployment rate, 40.8%; followed by youths between 25 – 34 years, 30.7%.
Such unimpressive economic data can be curbed, if Nigerian regulators and stakeholders tap into the potentials inherent in cryptos, to further strengthen the development of Africa’s largest economy.
Cryptocurrencies can help tackle the numerous challenges faced in international trade by many Nigerians, who don’t have a bank account. With the help of blockchain technology, many unemployed Nigerians can utilize the tools behind crypto and blockchain to generate income, as traditional jobs steadily become outdated.
Cryptocurrencies like Bitcoin could also help the unemployed facilitate small-scale international trade. Bitcoin enables these parties to sell products in exchange for Bitcoin and a boycott of traditional e-commerce systems, which often involves having to set up a merchant account with traditional banks, coupled with its attendant charges.
Cryptos, when fully adopted, will have a considerable impact on Nigeria, by increasing financial inclusion of individuals and companies. Particularly, by reducing the transaction fees and time, cross-border payments can be improved. This is beneficial for remittance payments, peer-to-peer lending, and international trade.
Experts discuss the utilization of cryptos to curb unemployment
In an exclusive interview with Nairametrics, Chike Okonkwo, Business Development Manager, OKEx, spoke on the role crypto can play in providing income for a substantial number of young Nigerians.
“Since the adoption of cryptocurrency in Africa, Nigeria has become a major hot zone in the African cryptocurrency space. The adoption of blockchain/cryptocurrency by Nigerians, has been able to give jobs to young Nigerians like me.
“The industry will further curb unemployment in Nigeria, but to achieve this — Blockchain and Crypto education must be a key focus because it’s a young industry. I personally encourage a lot of young people looking for a career path to explore the blockchain and crypto space.
“We need people who understand business development, media, marketing, programming, Crypto trading, legal Compliance, design/graphics, etc. in the industry.
“Young Nigerians have built trusted platforms for buying and selling of cryptos and there is more to come. I am a member of Stakeholders in Blockchain Association (SiBAN), which aims to unite/self-regulate players in the industry and Blockchain Nigeria User Group (BNUG), with core focus on educating people about the Industry.”
Charles Okaformbah, Blockchain Solutions Architect, in a note to Nairametrics, gave key insights on the job opportunities that crypto can offer Nigeria’s growing population.
“Aside the trading activities carried out by Nigerians, DeFi products can be created with cryptos to help create businesses that will employ more Nigerians.
“Trading with little funds might not really yield much in comparison with the inflated cost of living, but long-term investments on solid crypto-assets have proven to be a game-changer or yielded much more returns.
“Remittances can also be done with cryptos at a charge for international traders, who are currently limited by government’s monetary policies.
“There is also crypto-collateral. Aside crypto as an end-product, employment can also be provided via tech for tech enthusiasts/geeks, by creating their services like crypto/blockchain solutions for organizations, developing crypto-related products, providing audit for smart contracts, crypto forensic auditing, project management, and a whole lot more.”
Digital currencies or cryptocurrencies as a standalone will not make an all-encompassing impact on the Nigerian unemployment index. However, Nigeria must start building native Blockchain Infrastructures post-pandemic.
This way, the core sovereignty of the technology will originate and mutate in meeting our unique Nigerian market niche. The domino effect across the skilled, entrepreneurial and regular professional layers would be massive.
The improvement of financial inclusion is the most significant and most developed benefit of crypto-currencies for Nigerians.
Troubling signs on crypto market, SEC tags many crypto assets as Securities
These further suggest the head of the financial watchdog could tighten its grip on the crypto market.
Dark clouds hover above the cryptoverse as the leader of the world’s most powerful investments regulatory agency affirmed most crypto assets as securities.
Gary Gensler, the chairman of the U.S. Securities and Exchange Commission (SEC) in his most recent appearance on CNBC’s Squawk Box, opined that “many” crypto-assets were securities, meaning many of these assets required regulatory oversights and exchanges trading such crypto assets require at least a form of SEC regulation.
"At the core I think investor protection has helped economic growth," says SEC Chair Gary Gensler. "Transparency and competition in markets that's good for investors, that's good for issuers." pic.twitter.com/FoD8MH7JND
— Squawk Box (@SquawkCNBC) May 7, 2021
In his words:
“The extent that something is a security, the SEC has a lot of authority. And a lot of crypto tokens—I won’t call them cryptocurrencies for this moment—are indeed securities.”
What you must know
An asset is considered a financial security asset if it is a tradable financial asset and thus has monetary value.
What Gensler said suggests that the financial assets watchdog could tighten its grip on the crypto market. Recall that SEC is already battling with Ripple and calling XRP a security asset.
However, Gary Gensler described the flagship crypto asset as a store of value but with a very volatile characteristic and not a security.
It’s important to understand why the regulator doesn’t classify Bitcoin as a security. It is based on the fact that its existence began through mining as an incentive in validating a distributed platform. There are no pre-mined coins, no initial token offering, and no kind of business entity governing it.
A few months ago, Nigeria’s Securities and Exchange Commission released guidelines referring to cryptoassets as securities, except proven otherwise.
- The position of the Commission is that virtual crypto assets are securities, unless proven otherwise.
- Thus, the burden of proving that the crypto assets proposed to be offered are not securities and therefore not under the jurisdiction of the SEC, is placed on the issuer or sponsor of the said assets.
- Issuers or sponsors are expected to satisfy the burden of proving that the virtual assets do not constitute securities by making an initial assessment filing.
- However, where the finding of the Commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.
That being said, recent price actions reveal the bullish trend in the crypto market is still very much in play despite regulatory fears surrounding the crypto market as its market value now stands at $2.42 trillion, posting a 2.47% increase over the last day.
Coin of the week: Ever heard of EOS?
EOS is currently trading $11.33 with 936 million coins in circulation and a total supply of 1.02 billion.
EOS was created and designed to allow developers to build decentralized apps (DApps). DApps are any computer applications whose operation is maintained by a distributed network of computer nodes, as opposed to a single server.
The EOS platform was developed by the company Block.one, to make it as straightforward as possible for programmers to embrace blockchain technology and ensure that the network is easier to use than rivals. It also aims to deliver greater levels of scalability than other blockchains which can only do a dozen transactions per second.
EOS was created by Daniel Larimer and Brendan Blumer. Brenden Blumer is an entrepreneur, who was one of the co-founders of Okay.com, a digitally focused real estate agency in Hong Kong while Daniel Larimer is a software programmer who has also started a series of crypto ventures such as the crypto trading platform BitShares and the Steem blockchain. They are both members of Block.one’s executive team, with Brendan Blumer as CEO and Daniel Larimer as CTO.
Why Invest in EOS?
Block.one stated that EOS can accommodate the demands of thousands of DApps, even if they were being used by a high number of people. Parallel execution, as well as a modular approach, are said to drive this efficiency.
EOS represents a truly democratic system that takes into account the will of the people, in this case, its token holders, as they can vote for block producers as well as other matters such as protocol upgrades.
EOS, like many other coins, uses a delegated proof-of-stake consensus mechanism. This concept was conceived by Daniel Larimer and aims to solve some of the flaws that are seen in conventional PoW (Proof-of-Work) and PoS (Proof-of-Stake) systems.
As stated earlier, those who own EOS tokens can vote for representatives who will be responsible for validating its transactions. One of the advantages is that it helps eliminate consolidation, where smaller miners are pushed out by those who have greater levels of computing power and resources.
EOS is currently trading $11.33 with 936 million coins in circulation and a total supply of 1.02 billion. EOS has gained approximately 466% return comparing its 52 weeks low to its current price today. It is currently down 49.71% from its all-time high of $22.89 that was last traded on the 29th of April, 2018.
Recently, after the Biden administration’s proposed tax hike, the coin dropped from its previous 2021 peek of $8.80 to a 0.236 Fibonacci retracement zone of $4.74, creating a new higher-low that indicates a bull market. No surprise that the market broke its previous 2021 high to create a new high of $13.18 on the 6th of May, 2021, following news of the coin proposing to increase its staking rewards. It is believed that this running will lead the coin to break its previous all-time high of 2018.
Although it is not advisable to buy coins at peak prices, recent news as earlier mentioned, suggests that an increase in demand for the coin is imminent. Block.one mentioned that the protocol needs to increase the rate of inflation from its current pace of 1% to a rate between 1.2% and 3.8% intended to increase financial incentives for voters and block producers. While token holders still need to settle on what exact size the inflation rate will increase to, the possibility of higher yields for community participation has brought demand to the coin.
A second major development for the protocol is the EOS PowerUp model, which intends to allow users to pay a fee to power up their account for 24-hours to transact on the network as opposed to paying a transaction fee for every transaction. Block.one mentions that the PowerUP model offers EOS token holders another way to earn a yield by depositing unused EOS tokens to receive a percentage of all the ‘power-up’ fees that are generated by the network. This has become an increasingly attractive option as investors are searching for ways to avoid the high gas fees (transaction fees) and network congestion on the Ethereum (ETH) network.
With the overall cryptocurrency market bullish and projects like Litecoin (LTC) and Ethereum Classic (ETC) reaching new highs, EOS is a blockchain project that could benefit investors as the cryptocurrency bull market continues.
Nairametrics | Company Earnings
Access our Live Feed portal for the latest company earnings as they drop.
- Okomu Oil proposes dividend worth N6.7 billion for shareholders.
- Ardova Plc confirms appointment of Oladeinde Nelson-Cole as secretary.
- Cadbury Nigeria Plc set to hold 56th Annual General Meeting (AGM) on June 16.
- FCMB Group Plc appoints Muibat Ijaiya as Director.
- Afromedia Plc reports a loss after tax of N27.3 million in Q1 2021.