Nigeria has cemented its position as Africa’s blockchain and Bitcoin leader, ranking second globally on the adoption of digital assets last year. This year, the adoption will continue, with enterprise solutions, stablecoins, and regulations set to be among the main trends for the burgeoning sector.
Africa’s largest economy, Nigeria, also has the unfortunate distinction of being home to the largest population of unbanked adults. This makes digital payments critical to Nigeria, especially if they can target the marginalized, including women and those living in rural areas.
This makes stablecoins and digital asset payments one of Nigeria’s most important trends this year. John Colson, the CMO of pan-African exchange and digital wallet Yellow Card, says stablecoin adoption was among the biggest trends of 2023, and it shows no signs of slowing down in 2024.
“One of the biggest stories that we saw was a massive uptake in stablecoins and the mainstream adoption by African businesses and individuals,” Colson told CoinGeek.
“Africans are using stablecoins to address basic financial services challenges such as local currency devaluation and cross-border payments. At Yellow Card, 95% of our business is stablecoins.”
This stablecoin uptake will be fuelled by the expected launch of cNGN, Nigeria’s first regulated local stablecoin. cNGN is being developed by the Africa Stablecoin Consortium, which consists of banks and fintech firms. While its launch was expected in February, the consortium clarified that it’s working with regulators to gain the required licenses and that the launch date has yet to be set.
For the eNaira, the stablecoin adoption could spell its doom this year. The central bank digital currency (CBDC) has failed to attract Nigerians’ interest. Despite revamps and modifications, the eNaira has yet to crack the digital payments market. With a new CBN governor and a radical president, the eNaira’s future looks bleak.
Regulations and enterprise adoption
While Nigeria is more renowned for digital asset adoption, the West African country has been on a journey toward integrating blockchain, and 2024 could be the country’s biggest year for the technology.
Under its National Blockchain Policy, which was launched last May, the Nigerian government is pushing to adopt the technology in governance, healthcare, finance, supply chains, and other critical sectors.
The Ministry of Communications, Innovation, and Digital Economy has been charged with blockchain oversight, and Minister Bosun Tijani has been a great ally for the industry. The National Information Technology Development Agency (NITDA), which falls under Tijani’s ministry, has been handling the implementation of the blockchain policy, led by ardent Bitcoin advocate Kashifu Inuwa Abdullahi.
While the efforts have focused on education and creating awareness, Nigerian public and private sectors will likely kick up their adoption efforts a notch this year.
But as blockchain adoption surges, regulators must up their game to protect the consumers. The Central Bank of Nigeria (CBN) ended the year positively, ending its three-year ban on digital asset banking, a critical factor behind efforts such as the cNGN stablecoin.
While positive, the CBN directive is not enough. The government must implement a framework that gives investors, developers, and consumers confidence in blockchain and digital assets. Being Africa’s leader, any policy developments in Nigeria are likely to have a regional impact, making it critical for the West African nation to get it right.
Aside from the CBN, which has been anti-‘crypto’ for years, other Nigerian authorities have supported the sector. In the past, the Securities and Exchange Commission (SEC) has indicated its willingness to authorize digital asset products as soon as the CBN gave its nod.
Nigeria’s president is also pro-blockchain, further strengthening the expectation of favorable regulations. Tinubu took power under the pledge to create employment for the youth by promoting a digital economy, and blockchain was among the technologies he singled out as critical to this vision.
Watch: Digital Nigeria 2023 highlights Nigeria’s effort to leapfrog into the modern world
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