Nigeria’s crypto market hits $400m

Nigeria’s cryptocurrency market has surged above $400m despite the significant regulatory uncertainties, the Director General of the Security and Exchange Commission, Emomotimi Agama, has said.

According to a statement, the SEC DG disclosed that during the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria in Abuja recently.

Agama also highlighted the challenges and potential of crypto assets in Nigeria’s economic landscape.

He said, “Reports indicate that Nigeria’s crypto transaction volume reached $56.7bn between July 2022 and June 2023, representing a nine per cent year-over-year growth.

“The country’s crypto market is estimated to be worth over $400m, with a significant portion of the population involved in cryptocurrency trading and transactions.”

Agama highlighted that Nigeria’s cryptocurrency transactions reached $56.7bn between July 2022 and June 2023, reflecting a robust adoption rate despite economic challenges.

He noted that approximately 33.4 per cent of Nigerians were actively involved in cryptocurrency trading and transactions, indicating strong market penetration.

According to the SEC DG, regulatory uncertainty, security concerns, and financial literacy seriously threaten crypto use.

“The lack of a comprehensive regulatory framework has created uncertainty, which can deter both investors and innovators. Cybersecurity threats, including hacking and fraud, pose significant risks.

“A substantial portion of the population lacks adequate financial literacy, making them vulnerable to scams and risky investments,” he explained.

Nigeria is grappling with how to effectively regulate the rapidly growing cryptocurrency market in the country, balancing the need for innovation and financial inclusion with concerns over financial stability and illicit activities.

In February, the Central Bank of Nigeria expressed concerns about the large volume of transactions passing through crypto exchange platforms from unidentified sources.

The apex bank stated that it was working with other government agencies to address those illicit financial activities.

The bank claimed that last year $26bn was passed through Binance Nigeria from unidentified sources.

As a result, in the last three months, cryptocurrency trading platforms have come under scrutiny on the suspicion that they were manipulating the local currency’s value in the forex market.

This eventually led to the exit of Binance, the largest cryptocurrency platform, from the country and the delisting of the naira from P2P platforms.

Last month, the IMF urged Nigeria to establish a robust regulatory framework to oversee the growing crypto market.

The most recent regulation from the Nigerian SEC was to issue a 30-day deadline for all crypto firms and businesses to re-register under its new regulatory regime.