Blockchain trends in Nigeria for you to look out for in 2024

Do you really remember when Nigeria first launched a digital currency, eNaira, in 2021? This was just a tip of the iceberg – many jurisdictions have actually been opening up to crypto technology across the whole world. And if statistics mean anything, CoinGecko has initially valued the global cryptocurrency market cap at $2.4 trillion. Statista thinks the market size in Nigeria might grow by 12.66% within the next four years to reach US$52.49m in 2028.

Assuming that you actually give a damn about the recent changes in the blockchain industry in Nigeria, why don’t you wait a little bit to learn more?

You can well agree that crypto continues to attract many individuals because of its benefits. Let us take Solana as an example. Some experts claim that the network can process up to 65,000 transactions within a second. As if that were not enough, the network is highly scalable and can run several decentralized applications at very low costs and high speeds.

Nigeria’s blockchain infrastructure

Just recently, the National Information Technology Development Agency (NITDA) announced plans of adopting a local blockchain infrastructure to protect the nation’s data and encourage countrywide security. Blockchain boasts decentralization benefits that are relevant in today’s world, where people value privacy, security and transparency.

This announcement came just a few days after the agency released plans to launch research centres for this and other emerging technologies across different regions of the country. If you have been keeping a close watch on the crypto trends in Nigeria, you probably remember that just last year, the government approved the national blockchain policy. This would help the government to guarantee safe interactions amid tech innovation.

In support of this move, the University of Hertfordshire Law School delegation stated that it was the best bet as it would limit how foreign developers control Nigeria’s data. It even gets more problematic when these developers do not have the country’s best interests at heart.

Have you heard of the Per Kuppuswamy? Using available blockchain platforms, this scale exposes the country to the decisions of outside developers who are often not answerable to Nigerian laws. To mitigate this, the delegation believes that a local blockchain infrastructure could help restrict such control within the country’s borders.

It also looks like the country might actually need a data embassy. The delegation recommends that it be hosted in a third-party country and act as a backup and security for Nigeria’s data. In a time when data breaches are the order of the day, who will not want to ensure they are safe? So, according to the delegation, this embassy can be added as a measure to ensure digital continuity.

A growing DeFi market

After the Central Bank of Nigeria recently lifted its ban on crypto, institutional interest in digital currencies increased. In fact, according to some experts, this move might actually lead to the rise of concepts like GameFi, InsureTech and smart contracts.

Now that technology has made it possible to receive payments immediately, you do not want to keep waiting for ages before you can complete a transaction. No one wants such an experience. A PYMNTS study actually reveals that 78% of buyers claim to be highly satisfied if they receive disbursements in real time. But this statistic might not really reflect the general love for instant payments – it could be higher as an earlier study revealed that about 92% were extremely satisfied if they found such experiences.

This, and many other experiences, are what the DeFi sector aims to establish. Especially in small scale businesses where costs of production can be high, smart contracts can help automate procedures, thus reducing costs.

According to a report by Emurgo Africa, Nigerian startups raised $469 million last year, of which 35% went to fintech. Investors expect such moves to foster the growth of crypto exchanges, digital banks and DeFi. In fact, in 2022 alone, this West African country emerged as the country with the largest number of local startups on the continent. With more DeFi companies launching in the economy, Statista anticipates that this market might hit US$11.8m in 2025.

Regulatory oversight

Are you aware that a few months ago, the CBN gave the African Stablecoin Consortium (ASC) a go ahead to pilot a Nigerian stablecoin? The coin was actually to go live in February this year (2024).

More Nigerians continue to show love for digital payments, which puts pressure on the CBN to come up with ways of adapting to these ever-changing preferences. For example, as tokenization becomes popular, the need for distributed ledger technology also increases.

It might also be worth to note the promise of a growing blockchain market in Nigeria comes amid the SEC taking a tough stance on crypto.

When we look ahead, things might be promising for blockchain, but this does not necessarily imply a relaxed regulatory ecosystem. All across 2024, things haven’t been as easy. We have not stopped seeing Nigerian authorities implement measures to restrict crypto and even target top industry players.

You perhaps are aware of the recent Accelerated Regulatory Incubation Programme regulations. This is because the SEC, with the help of these regulations, seeks to look into the business models of crypto exchanges. And also to discourage the public from investing in platforms that are not regulated within these boundaries, the regulator calls on the locals to always carry out their due diligence and check whether the platform they are interested in is within the confines of these regulations.