By Diamond-Michael Scott
Nigeria is a large, densely populated West African country with a population estimated at over 200 million. The most populous country in all of Africa, it is graced with an abundance of skilled and unskilled labor making it a fervent ground for international trade.
The country also has a rich store of mineral resources, sub-Saharan Africa’s largest. It is also the world’s 13th largest oil producer and exporter.
But despite this foundational economic base, the country remains saddled with uncertainty and instability around the Nigerian naira, the country’s fiat currency. This and other factors have been the primary accelerant behind the explosive rise in the everyday use of bitcoin among its Nigeria’s citizens.
According to data compiled from Coin Dance by the global crypto platform Paxful, Nigeria has emerged as the largest P2P bitcoin marketplace in the world, with over 52% of the market share. In the past five years, Nigeria has seen 60,215 bitcoin transactions valued at $566 million, placing it second behind the United States.
Between January and September of 2020, amid pandemic restrictions, Paxful recorded a 137% rise in new registrations on its platform in Nigeria. This comes as peer-to-peer exchanges have emerged as a viable way to purchase bitcoin in Africa due to the lack of government restrictions on cryptocurrency.
The growing awareness around the ease of use of platforms like Paxful, Binance, and Luno have resulted in a sustained upward tick in Nigeria’s bitcoin liquidity, a key factor driving adoption. Most of this trading is facilitated and aided by messaging platforms like Telegram, WhatsApp, and WeChat.
Nathaniel Luz, Lead for Dash Nigeria and author of the book “Digital Is The Cash” had this to offer about Nigeria’s exploding bitcoin market presence and the market factors fueling it:
“Remittances and international payments are the primary uses of crypto in Nigeria and most of Africa. There has definitely been a surge in the use of crypto instead of traditional financial platforms given the ever-increasing restrictions by the Central Bank of Nigeria on money movements in and outside of our borders.”
Luz says that another obvious factor that has led Nigerians to maximize the use of crypto is the recent coronavirus pandemic. He notes:
“Many businesses and transactions had to take an indefinite pause for months, last year. However many owners have stated that crypto allowed them to continue to thrive. This was especially true for those who had to make payments for imported goods.”
Asked how this trend is influencing the broader cryptocurrency space including the adoption of Dash, Luz provided this assessment:
“With this growth, Dash has risen to our country’s second most used crypto for remittances according to data compiled by coinprofile.co – a crypto remittance platform in Nigeria. I believe that Dash will play an increasingly important role over the next few years as users become interested in using a crypto with a superior user experience. Dash has solid plans for long-term growth and has so much potential in terms of adoption and use.”
In terms of what sorts of cryptocurrency trends he sees on the horizon for Nigeria and the rest of the African continent in 2021, Luz provided this concluding comment:
“There are lots of UX improvements currently in the works that when complete will lead to mainstream adoption of Dash. Users soon will be able to send Dash to usernames and not just just alphanumeric addresses. Moreover, I anticipate the birth of platforms aiding in payments. This will be particularly valuable for Nigerians who have had issues using their debit cards for international payments given the monthly cumulative international payment limits of $20 per user. The future looks very promising for sure.”