Showing posts with label crypto currency. Show all posts
Showing posts with label crypto currency. Show all posts

Wednesday, February 21, 2024

Nigeria plans clampdown on Binance, other crypto firms

The Nigerian government is considering blocking the online platforms of Binance and other crypto firms to avert what it considers continuous manipulation of the forex market and illicit movement of funds, officials with knowledge of the policy option have told PREMIUM TIMES.

The recent unprecedented weakening of the Nigerian currency has seen the naira falling to all-time low of N1,800 to a dollar in the parallel market.

Presidency and regulatory sources say the government decided to move against Binance and other crypto firms following reports that currency speculators and money launderers were using them to execute criminal activities. Authorities believe the ‘criminal activities’ going on on platforms are contributing significantly to the weakening of the naira.

Binance, a digital assets platform, serves as a window for peer to peer transaction allowing users to advertise interest to sell or buy currencies of their choice.

In September 2023, Nigeria’s Securities and Exchange Commission (SEC) placed a disclaimer on Binance Nigeria Limited, saying the platform was “neither registered nor regulated by the Commission and its operations in Nigeria are therefore illegal”.

Despite the warning by the regulatory agency, the firm continued its operation, attracting huge patronage especially among urban youths and suspected speculators and money launderers.

Aside suspicions of economic sabotage, officials also speak of national security concerns as the platforms are often patronised by other criminal groups including for payment of ransom.

Law enforcement sources say the digital asset platforms are also routinely deployed for manipulation of forex values through fake deals that serve to prop up values or cause a fall.

A source at the Economic and Financial Crimes Commission (EFCC) involved in probing criminal complaint against digital asset platforms, who was however not authorised to speak to the press, described the process as a “sophisticated heist against the Nigerian economy”.


According to her, by allowing simultaneous opening of buy and sell windows for a single user, manipulators often fake interest to sell dollars which they then buy at a speculated rate to themselves through the buy window.


“This therefore gives the dollar a fake value against the naira which then sets a frenzy and mislead the market. This fake price is then often quoted by BDCs who raise their prices to meet the Binance benchmark even without any corresponding demand in that segment,” she said.

A senior executive at the Central Bank of Nigeria (CBN) described as “troubling” the bearish downward trade of the naira against the dollar in the last 10 days, attributing it to artificial devaluation caused by the speculative sites.

“Through manipulative rent seeking, Binance’s global reach results in higher USD to NGN exchange rates often being used as a benchmark for currency trading, misleadingly devaluing the Naira in global markets.”

But he added that trading on the platform is encouraged by activities of money-launderers and terrorist financiers “who have no qualms with the arbitrage”.

“We started noticing this sharp trend from February 9, and since then it has caused significant devaluation of the naira against the USD. This is simply criminal,” he said.

Binance has had similar accusations of currency manipulation and unethical conduct leading to sanctions in many countries and an ongoing lawsuit in the United States.

If the government decides to invoke a ban on the digital asset trading site it would be treading the path of countries like Malaysia, France and Malta, among others.

The Office of the National Security Adviser (ONSA) had announced Tuesday that it was joining forces with the Central Bank of Nigeria to clamp down on currency speculators and economic saboteurs.

The Head of Strategic Communication at ONSA, Zakari Mijinyawa, hinted in his Tuesday statement that individuals and organisations involved in wrongful activities in Nigeria’s Forex market would be identified, investigated and penalised.

Contacted on Thursday night on the planned clampdown on Binance and other crypto firms, Mr Mijinyawa said he was at an “important meeting”. He did not answer or return subsequent calls made to him.

Binance could not be reached Wednesday morning. Multiple calls to a customer service number listed for it rang out unanswered.

By Abdulrahman Abdulmalik, Premium Times

Related story: Video - Central Bank of Nigeria gives guidelines on cryptocurrency

Tuesday, January 16, 2024

Video - Central Bank of Nigeria gives guidelines on cryptocurrency



The Central bank in Nigeria has released guidelines for banks opening cryptocurrency accounts after it lifted its ban on crypto assets. However, there are calls for the government to embark on crypto-awareness campaigns among young people as a way to boost the economy. 

CGTN

Related stories: Central Bank of Nigeria Lifts Ban on Crypto Transactions

Video - Nigeria continues to record surge in adoption of cryptocurrencies

 

 

Thursday, December 28, 2023

Central Bank of Nigeria Lifts Ban on Crypto Transactions

The Central Bank of Nigeria (CBN) has lifted a ban on transacting in cryptocurrencies.

At the same time, the bank said there is a need to regulate virtual asset service providers (VASPs), including cryptocurrencies and crypto assets, Reuters reported Wednesday (Dec. 27), citing a Friday (Dec. 22) circular issued by the bank.

The CBN imposed a ban on banks and financial institutions dealing in or facilitating transactions in crypto assets in February 2021 due to concerns over money laundering and terrorism financing, according to the report.

However, the Securities and Exchange Commission, Nigeria published regulations in May last year that aimed to find a middle ground between an outright ban and unregulated use of crypto assets, the report said.

In its circular dated Dec. 22, the CBN outlined guidelines for banks and financial institutions regarding the opening of accounts, designated settlement accounts, settlement services, and acting as channels for foreign exchange inflows and trade for firms transacting in crypto assets, per the report. The guidelines emphasize the need for VASPs to obtain licensing from the Nigerian SEC to engage in crypto business.

The circular also states that banks are still prohibited from trading, holding or transacting cryptocurrencies, according to the report.

Nigeria has witnessed a surge in cryptocurrency adoption, particularly among its young and tech-savvy population, the report said. Many individuals have turned to peer-to-peer trading offered by crypto exchanges as an alternative to traditional financial services.

The volume of crypto transactions in Nigeria grew by 9% year over year to $56.7 billion between July 2022 and June 2023, per the report, which cited data from blockchain research firm Chainalysis.

It was reported in October 2021 that despite the ban from their country’s central bank, people in Nigeria had turned to cryptocurrency to conduct business, send payments and guard their savings.

In November 2022, the Securities and Exchange Commission, Nigeria said that it had no plans to make crypto part of its digital asset trading goals until regulators agree to standards that keep investors safe.

The commission said at the time that it would promote investment in “sensible digital assets,” with investment protection while also looking into blockchain technology to drive virtual and traditional investment products.

PYMNTS

Related stories: Crypto usage growing further in Nigeria

Video - Nigeria continues to record surge in adoption of cryptocurrencies

Monday, December 19, 2022

Nigeria to possibly make Bitcoin usage legal






 

 

 

 

A local Nigerian newspaper has reported that Babangida Ibrahim, chairman of the House of Representatives Committee on Capital Market and Institutions of Nigeria, claimed the country will soon pass a law making the usage of bitcoin and cryptocurrencies legal. The bill would amend the 2007 Investments and Securities Act and would recognize bitcoin as legal capital for investment.

Back in February of 2021, Nigeria effectively banned the usage of bitcoin with a letter prohibiting regulated financial businesses from “dealing” with cryptocurrencies. In the same year, Bitcoin Magazine reported Nigeria soaring to the largest volume of bitcoin peer-to-peer trading in the world, and Chainanalysis reports showed that Nigeria had greatly accelerated bitcoin adoption.


The newspaper report described how Ibrahim pointed to Nigeria being behind in regards to regulation of the industry, saying “Like I said earlier during the second reading, we need an efficient and vibrant capital market in Nigeria. For us to do that, we have to be up to date global practices.”

If the proposed regulation properly addresses the growing bitcoin usage within the country, it could be a major catalyst for the African continent’s most populated country.

Bitcoin has had a large presence in the country despite the current ban, including the construction of a Bitcoin village, Nigerian Bitcoiners participating in all sorts of development, philanthropic work from Bitcoin companies and mining being an active industry there. 

Bitcoin Magazine

Related stories: Thriving Under Pressure: Why Crypto Is Booming in Nigeria Despite the Banking Ban

Digital art thrives among crypto-curious Nigerian artists

Wednesday, September 7, 2022

Nigeria To Establish Special Economic Zone for Bitcoin

Nigeria is seeking to create the first economic free zone for bitcoin and cryptocurrency in West Africa through the Nigeria Export Processing Zones Authority (NEPZA), per a press release.


NEPZA is in discussions with Binance, one of the leading cryptocurrency exchanges, as well as Talent City which specializes in building special economic zones.

Our goal is to engender a flourishing virtual free zones to take advantage of a near trillion dollar virtual economy in blockchains and digital economy," said Adesoji Adesugba, NEPZA's managing director.

Furthermore, NEPZA explained that if a partnership is reached, the final product would mirror that of the Dubai Virtual Free Zone.

In fact, this past December, Binance entered into a Memorandum of Understanding with the Dubai World Trade Center. The memorandum intends to make Dubai a hub for bitcoin and cryptocurrency related products and services by creating a “new international virtual asset ecosystem.”

In February of last year, the Central Bank of Nigeria issued a letter banning regulated institutions from “dealing” with bitcoin or cryptocurrencies. Following the ban, Nigeria saw an uptick of 27% in peer-to-peer (P2P) bitcoin transactions across the country.

Indeed, just last year Africa as a whole became the largest country in P2P transactions in the world by volume. Around the same time, Chainalysis reported a global adoption index which showed Nigeria in the top 10 countries worldwide for its adoption of bitcoin.

Moreover, as Dubai and Nigeria look to establish special economic zones to benefit bitcoin and other cryptocurrencies, we can take a look at existing economic zones. For instance, the free city of Próspera is an example of a customizable economic framework. 

By Shawn Amick

Bitcoin Magazine

Related stories: Nigerians Are Using Bitcoin to Bypass Trade Hurdles With China

Why Bitcoin has been so successful in Nigeria

Jack Dorsey Tweets Support For Nigerian Bitcoin Adoption

Friday, August 19, 2022

Nigeria Seeks to Boost E-Naira Users 10-Fold as Cryptos Grow

 Nigeria, which has attracted just 840,000 users for its digital currency since October, is seeking to boost adoption of the e-naira almost 10-fold in the next 12 months by luring people without bank accounts.

The Central Bank of Nigeria is targeting 8 million users in the “second phase” of the digital currency’s expansion, central bank Governor Godwin Emefiele said Thursday in Abuja, the capital.

“Just like the naira, the e-naira is expected to be available to all Nigerians and will provide more possibilities to bring the unbanked into the digital economy,” Emefiele said during the finals of a central bank-sponsored hackathon to build products around the e-naira.

The steady depreciation of the naira has seen many residents of Africa’s most populous nation pivot toward cryptocurrencies, even though the central bank ordered commercial lenders to stop transactions or operations in digital tokens. While there are 270,000 active users of e-naira, as many as 33.4 million Nigerians have either owned or traded cryptocurrencies, according to a report by KuCoin, a Seychelles-based crypto exchange.

The adoption of stable coins like USDT is on the rise in the West African nation, according to Paxful, a peer-to-peer exchange. The average monthly trade volumes increased 10-fold to $25 million in June 2022. Trade volumes for the first half of 2022 are nearly $400 million compared to $760m for last year on Paxful alone.

While the e-naira is an exciting project, accelerating inflation and a weakening currency have deterred its adoption, said Keturah Ovio, chief executive officer of book-keeping startup Dukka. “To drive adoption, the central bank has to take initiatives to drive down inflation and improve trust in the local currency.”

Africa’s most-populous nation has shown more interest in cryptocurrencies than any other country since the digital assets began to decline in April, according to a study by price tracker CoinGecko.

Meanwhile, from Monday, people without bank accounts will be able to download and open an active e-naira wallet by using the unstructured supplementary service data, or USSD, and dialing *997 from their mobile phones, said Emefiele.

Only about 45% of adults in the nation with more than 200 million people have bank accounts, according to the World Bank. That compares with an average of 70% in the BRICS economies. The e-naira has attracted slightly over 200,000 transactions valued at 4 billion naira ($9.4 million), just a fraction of the 54 trillion naira through the Nigeria Instant Payment System between January and February 2022.

The expansion of access to the e-naira platform will further deepen its integration with the existing national payment infrastructure, Emefiele said. Both merchants and consumers with bank accounts will now be able to use the nation’s existing payment mechanism to transfer and receive e-naira.

“We don’t have a choice but to live with the fact that we are now in a digital economy,” Emefiele said. “The use of cash will dissipate to zero and the use of digital currency will increase to become part of our lives.”

Anthony Osae-Brown

Bloomberg

Related story: Thriving Under Pressure: Why Crypto Is Booming in Nigeria Despite the Banking Ban

Wednesday, August 10, 2022

The Most Curious Nation About Crypto Is Nigeria, Study Shows

 Africa’s most-populous nation showed more interest in cryptocurrencies than any other country since the digital assets began to decline in April, according to a study by price tracker CoinGecko.

Nigeria scored 371 in the study that looked at Google Trends data for six searches such as “buy crypto” or “invest in crypto” that were then combined to give each English-speaking nation a total search ranking. The West African country was followed by the United Arab Emirates and Singapore.

“This study provides interesting insight into which countries remain most interested in cryptocurrency in spite of market pullbacks,” CoinGecko’s co-founder Bobby Ong said in an emailed statement. “The countries at the top of this list appear to be keenest to buy the dip, and highlight their long-term outlook for cryptocurrencies.”

The Nigerian stock exchange said in June it planned to start a blockchain-enabled platform next year to deepen trade and lure young investors to the market. That came after its central bank in early 2021 ordered commercial lenders to stop transactions or operations in cryptocurrencies, citing a threat to the financial system.

Singapore had the most searches on Ethereum, while Georgia sought information on Solana, according to CoinGecko. 

By Helen Nyambura

Bloomberg

Related stories: Nigerian Youth Propels the Country to the Top of Google Bitcoin Search Rankings

Jack Dorsey Tweets Support For Nigerian Bitcoin Adoption

Video - Nigerian returns bitcoins worth $80,000

Friday, October 29, 2021

Nigeria’s eNaira digital currency had an embarrassing first week

It is not time for adieu yet, but Nigeria’s central bank digital currency—the first such attempt in Africa—has not gotten off to a great start.

The eNaira, as the digital currency is called, was initially scheduled to launch on Oct. 1 this year. That was postponed with the excuse that the launch clashed with independence day celebrations. Nigerians became suspicious of their central bank’s readiness for a digital currency rollout; after all, independence day is a fixed event every year and so authorities should have planned better.

Shrugging off sceptics, president Muhammadu Buhari unveiled the eNaira wallet at an indoor, socially-distanced ceremony in Abuja three weeks later (on Oct. 25,) where only three media houses were invited and no questions were taken, according to Reuters. Buhari said the innovation could grow Nigeria’s economy by $29 billion in the coming decade, and further financial inclusion goals.

But on just the fourth day, the eNaira was looking dead on arrival.


eNaira app hasn’t worked well


In designing the eNaira, Nigeria hoped to follow the emerging blueprint for central bank digital currencies, especially China’s.

The eNaira is supposed to live within a mobile wallet (pdf), have the same value and be interchangeable with the physical naira for everyday transactions. Nigerians believe the eNaira, which is governed by a centralized blockchain, is part of the central bank’s drive to discourage cryptocurrencies’ popularity among Nigeria’s youth, just like China’s effort with the digital yuan.

And so this week, Nigeria’s central bank made two types of eNaira wallets available on Google and Apple stores: one for individuals, and another for merchants. But some users say parts of the wallet for individuals have not worked properly.

Fisayo Fosudo, a Nigerian YouTuber who reviews gadgets and apps, said he and three friends initially got error messages that the eNaira app could not match their emails to their bank verification numbers. He would later register successfully but found broken links that did not lead to helpful support pages on the central bank’s website. “Was really looking forward to reviewing the eNaira app but it’s been hard to get it to work seamlessly. We wait,” Fosudo said.

After many users left poor reviews for the Android version of the eNaira app for individuals, it was taken down. It had been downloaded 100,000 times before that. The Apple Store version remained available at press time.

Nigeria’s central bank is pre-empting eNaira scams

Central bank digital currencies are not immune to scams. Last October, Chinese authorities started seeing fake digital yuan wallets, especially because the government had chosen to give away $6.2 million worth of digital yuan for free to citizens to encourage adoption.

Nigeria’s eNaira may be struggling to take off but the central bank is already warning of potential scams. In a press release on Oct. 27, the bank clarified that it did not have a dedicated eNaira account, and that it was not distributing 50 billion naira in eNaira.


What of the other CBDC plan in Africa?

South Africa is the other large economy in Africa contemplating a central bank digital currency, but it’s not quite through the same process as Nigeria’s.

Instead of a rollout to citizens for intra-country transactions, South Africa’s CBDC trial is part of a project by the Bank for International Settlements (BIS) which includes the central banks of Australia, Singapore, and Malaysia. They are teaming up to test the use of CBDCs for international settlements.

Project Dunbar, as it is called, will use CBDCs to create platforms for financial institutions to transact directly with each other using digital currencies issued by the central banks. The hope is to make transactions faster, cheaper, and without a need for intermediaries.

By Alexander Onukwue 

Quartz

Related story: Video - Nigeria becomes first African nation to roll out digital currency

Tuesday, October 26, 2021

Video - Nigeria becomes first African nation to roll out digital currency

 

Nigeria has launched a digital currency. Called eNaira, it is hoped to foster economic growth. But there are challenges in its use. Al Jazeera's Ahmed Idris reports from Nigeria’s capital city of Abuja.

Related stories: The NFT Craze Is Helping Nigerian Artists Go Global

Digital art thrives among crypto-curious Nigerian artists

Nigerians Are Using Bitcoin to Bypass Trade Hurdles With China

 

Monday, June 28, 2021

Unpicking Twitter boss's passion for Nigeria

Twitter CEO Jack Dorsey is no stranger to controversy but in Nigeria he has become embroiled in the battle between the country's tech-savvy youths and a ruling class that is seen to be out-of-touch with their thinking.

His Twitter platform was used to galvanise support for last year's #EndSars protests, which began as a movement against police brutality and morphed into a confrontation between the political class and Nigeria's youth.

But Twitter is now blocked in the country after a recent tweet by President Muhammadu Buhari, 78, was deleted.

Many Nigerians adore Mr Dorsey. His ideals of open internet, freedom of expression and economic rights resonate with those who feel marginalised by their government.

Far from being intimidated by the Twitter ban, Mr Dorsey has kept tweeting about Nigeria and has captivated many here.

As the nation marked Democracy Day on 12 June and protests were held in different cities calling for a reversal of the block on Twitter, he tweeted the Nigerian flag with an emoji of a handshake and "#bitcoin".

The next day he retweeted an article calling for the Nigerian government to pursue a Bitcoin standard, and quoted a tweet with the caption "the people of Nigeria will lead #bitcoin".

Some analysts say this shows Mr Dorsey is a businessman looking after his interests.

While he is more famous as the CEO of Twitter, Mr Dorsey is also the founder of Square and Cash 

App, two payment processing platforms with interests in cryptocurrencies, especially Bitcoin.

 

Cryptocurrencies targeted

Nigeria's cryptocurrency market is the largest in Africa.

High inflation and a weak national currency has led millions to turn to digital currencies, which some see as safer and more reliable.

"There will always be room for products and solutions that help Nigerians save, invest and hedge in currencies other than in naira [the local currency]," said Faith Babafemi, a cryptocurrencies expert in Lagos.

She said there was space in the Nigeria cryptocurrencies market for services like trading that Mr Dorsey's financial apps can provide.

However, Nigeria's crypto-market is under regulation after the central bank placed restrictions in February.

Concerned by the growing adoption of digital currencies and what it saw as the harm it posed to the Nigerian economy, the government barred financial institutions from dealing in them.

But the regulation has had the opposite effect as investors have seen an increase in activity.

Much like the way people have got around the Twitter ban, there has been a surge in cryptocurrency transactions between individuals that bypass the financial institutions.

"When you look at the Twitter ban and you look at the cryptocurrency ban, it really draws from the same government-driven fear which is: 'To what extent can we allow Nigerian youths to exercise freedom on the internet?'," said Senator Ihenyen, head of Nigeria's blockchain and cryptocurrencies association.

Mr Dorsey's defenders argue that while he is advancing his business interests, he also appears to be genuinely interested in Nigeria - even though he overlooked it for Twitter's Africa headquarters, preferring Ghana instead.

One-stop shop for everything

Mr Dorsey visited Lagos as part of his tour of Africa in November 2019, and a Nigerian, Uche Adegbite, is among the social media giant's senior directors.

Nigeria's former Finance Minister and current World Trade Organisation head, Ngozi Okonjo-Iweala, had also previously served on Twitter's board.

The founder of the Co-Creation Hub in Lagos, Bosun Tijani, who met Mr Dorsey during his visit, said the Twitter CEO left with a strong belief that the platform was having a real impact in Nigeria.

"It's a country that is typically hierarchical but Twitter is one of the platforms that gives opportunity for people, regardless of who you are, to have conversations that naturally in the Nigerian context you never get to have," he said.

In fact, Twitter in Nigeria is more than a platform. It is a one-stop shop for everything - from job openings, to a missing persons portal, and a civic space to hold public officials to account.

It made its biggest political impact during last year's #EndSars demonstrations, when it became the platform of choice for the young demonstrators. They succeeded in forcing the president to scrap the Special Anti-Robbery Squad (Sars), a notorious police unit that was known for its brutality.

However, the peaceful protests were then hijacked by thugs who damaged public buildings across Nigeria.

For that, the government says it holds Mr Dorsey "liable", with some officials going as far as to accuse him of being part of a campaign to remove President Buhari from office.

 

Buhari's controversial tweet

Information Minister Lai Mohammed has alleged that Mr Dorsey raised funds through Bitcoin to sponsor one of the protest groups , and Twitter - which created a special emoji in support of the demonstrations - was used to stoke the crisis. Mr Dorsey has not commented on the allegations.

Relations hit a new low last month when the government blocked Twitter, alleging that the micro-blogging site was being used to undermine "Nigeria's corporate existence" through the spreading of fake news that had "violent consequences".

This came after Twitter deleted a tweet by President Buhari about the security issues in south-east Nigeria. He said "those misbehaving today" would be dealt with in "the language they will understand".

The president faced a massive backlash from users who saw this as a threat of violence. As a result Twitter accused accusing Mr Buhari of violating its rules and removed the tweet.

The government was furious and accused Twitter of double standards. It highlighted messages by Nnamdi Kanu, the exiled leader of a banned group calling for secession from Nigeria, which it argued encouraged the killing of police officers.

Those tweets were subsequently deleted by Twitter.

The Twitter founder has largely stayed out of politics in other African countries, fuelling suspicion among his critics that he not only has a business interest in Nigeria, but also a political interest.

But Mr Tijani simply sees Mr Dorsey as representing a new breed of CEOs.

"He's not the generation of Bill Gates. He's part of the generation that doesn't rely on the government," he said.

Moreover, Nigeria's youth are using his invention to push for political and economic change, worrying a government that does not have a good grasp of technology.

"[Government leaders] are beginning to see that this technology can be used to challenge them in ways that people have never been able to challenge them," Mr Tijani added.

By Nduka Orjinmo

BBC

Related stories: Biden Administration Calls On Nigeria To Reverse Twitter Ban

Trump congratulates Nigeria for Twitter ban, says more countries should do the same

The new 'jollof wars' and why Twitter chose Ghana over Nigeria for its first Africa base

Friday, June 25, 2021

Digital art thrives among crypto-curious Nigerian artists

 

At only 29, Nigerian pop-artist Osinachi has sold paintings on Microsoft Word for several thousand euros, or the equivalent amount in ether, a cryptocurrency often used to buy digital art.

One of his works, Becoming Sochukwuma, shows a black dancer wrapped in a tutu made of African fabric, dreadlocks tied in a bun, swirling on a computer screen.

But what makes the painting truly unique is its endorsement with an NFT (Non-Fungible Token) -- a set of data stored in a blockchain that is used as a certificate of ownership.

The digital painting was sold in April for $80,000 worth of virtual money on the crypto-art market, a growing business in Africa's most populous country.

Worldwide, NFTs, which serve as a unique identifier, have reassured collectors when buying online art and propelled digital artists to stardom. Between January and May, NFTs generated around $2.5 billion worth of transactions according to the website NonFungible.com sparking the interest of global auction houses Christie's and Sotheby's.

Osinachi's pieces have done very well on this emerging market and in just a few months the young man has become the most famous African crypto-artist.

He was already using Microsoft Word to paint when he was at university but "gallerists didn't care about digital art" until recently, he told AFP.

It was in 2017 that he discovered he could sell his artwork directly to buyers using a blockchain - where a record of NFT ownership can be stored.

In the past six months, as crypto-currencies and NFTs have boomed, digital art like Osinachi's has thrived.

"Now, galleries are after him," said Oyindamola Fakeye, creative director at the Center for Contemporary Art in the country's cultural capital Lagos.

"He has a very positive influence on other African digital artists."

Blockchain, cryptocurrency, NFTs, are terms that are no longer foreign to Osinachi, who spends a lot of time in person and online explaining what they are to other artists.

Many creative minds and entrepreneurs in Nigeria are inspired by his success.

It's a "revolution in the art space", said fellow crypto-artist Niyi Okeowo, whose afro-futurist work combines photography, 3D and graphic design.

Nigeria has about "a hundred" digital artists, Okeowo says, and "most have been inspired by Osinachi".

With its large, youthful, creative and connected population, the West African nation has "the potential to lead" when it comes to NFTs, Osinachi believes.

"We have plenty of talents here. The creative energy in Lagos alone is baffling among young people."

Nigerians are also fond of cryptocurrencies, contributing to the success of NFTs.

In times of economic crisis, with a devalued naira, a growing number in the country are chosing to invest in digital currency.

Last year, more than $400 million were exchanged in cryptos, making Nigeria the third-largest user of digital money worldwide, behind the US and Russia, according to Statista, a German company specialising in market and consumer data.

Entrepeneur Uyi Omokaro was an early believer in the potential of NFT in Nigeria.

This month, he launched Wearmasters, a platform to sell Africa-made NFT art, where he hopes to bring on some of Nigeria's most talented emerging artists like 23-year-old painter Daniel Pengrapher

"Our ambition is to give them international visibility through NFT."

For now, NFT collectors are few in the country. One of them is Michael Ugwu, director of a digital studio in Lagos.

"I'm one of the only ones," says Ugwu.

He started investing in cryptocurrencies in 2017, after several devaluations of the naira, before discovering his real passion: the crypto-art market.

"The traditional art space can be a little bit snobbish," said Ugwu. On the crypto-art market, he says he "found a community, so welcoming, so interactive".

He owns about "a hundred" NFTs he says proudly, but he also considers them investments.

Ugwu has used NFTs as insurance to obtain loans on the crypto-finance market, a process that would take months in the traditional banking system.

Ugwu remains confident, despite recent crypto crashes that automatically devalue his collections.

"Most of my friends think that I'm crazy... Let's wait and see in 10 years."

AFP

Related stories: The NFT Craze Is Helping Nigerian Artists Go Global

Germany has agreed to return Nigeria’s looted treasure. Will other countries follow?

Nigeria’s crackdown on Bitcoin echoes global crypto conundrum

 



Monday, June 14, 2021

Jack Dorsey Tweets Support For Nigerian Bitcoin Adoption

CEO of Twitter, Jack Dorsey, has been signaling his support for Nigerian bitcoin adoption through a series of tweets over the weekend.

Dorse is one of the big celebrity names in the crypto community. As a result, his tweets on crypto pick up a lot of interest, no matter how cryptic or simple they are.

He began his series of tweets simply with a single Nigerian flag. This happened a day after the government announced it would ban Twitter in the country. The ban came into effect as a result of Twitter deleting tweets by President Buhari.
Nigerian Bitcoin tweets

Later the same day, Dorsey published another tweet showing the Nigerian flag “shaking hands” with bitcoin.

This was followed by him tweeting, “The people of Nigeria will lead #bitcoin.”

This was a quote tweet over an open letter by United States footaball player Russell Okung to the Nigerian President.

Okung published the open letter in Bitcoin Magazine. In it, he urged the Nigerian government to accept a national bitcoin standard. In the article he wrote:

“Soon every nation will be faced with this decision, but those who seize the present moment proactively as we have just witnessed in El Salvador, will enjoy significant advantages globally for generations to come."

Finally, Dorsey’s last tweet on the subject was a graphic showing Africa leading in peer-to-peer bitcoin trading volume growth for 2021.

This is not the first time the Square CEO has shown interest in crypto and Africa. In 2019, after visiting Ghana, Ethiopia, South Africa, and Nigeria, Dorsey said he planned to move to a country on the continent for a few months in 2020.

However, he reconsidered the move as the COVID-19 pandemic picked up.
Nigeria and cryptocurrency

In 2020, Nigeria became the second-biggest bitcoin trader in the world. However, the government’s relationship with cryptocurrencies has been unstable.

In September 2020, the Nigerian Securities and Exchanges Commission announced a historic regulatory framework recognizing crypto assets as securities. However, this doesn’t mean that crypto is fully recognized. This is due to the central bank’s positionbeing in direct opposition.

In early 2021, the Central Bank of Nigeria (CBN) reaffirmed its order to all financial institutions. This warned them to stop providing on and off-ramp crypto services. This caused issues for centralized exchanges operating in the country.

By Leila Stein

Yahoo Finance

Related stories: Why Bitcoin has been so successful in Nigeria

Video - Nigeria's booming investment in cryptocurrency continues despite ban

Friday, May 28, 2021

Crypto will ‘come to life’ in Nigeria, central bank governor says

Emefiele said the Nigerian government will do its best to prevent crypto from being used to finance illicit activities.


At a 279th meeting of the Monetary Policy Committee in Abuja, Central Bank of Nigeria Governor Godwin Emefiele expressed confidence that cryptocurrencies like Bitcoin (BTC) will be legal in the country, Business Insider reports Wednesday.

Emefiele did not directly mention a decision to reverse the CBN’s February ban of institutions from buying and selling crypto, but noted that the bank has been investigating the industry:

“We are committed in the CBN, and I can assure everybody that digital currency will come to life even in Nigeria [...] Under cryptocurrency and Bitcoin, Nigeria comes 2nd, while on the global side of the economy, Nigeria comes 27th. We are still conducting our investigation, and we will make our data available.”

Emefiele also said the Nigerian government will do its best to prevent crypto from being used to finance illicit activities. “We found out that a substantial percentage of our people are getting involved in cryptocurrency, which is not the best. Don’t get me wrong, some may be legitimate, but most are illegitimate,” he said.

The banker also expressed concerns over the crypto market crash in mid-May, which has been largely attributed to Tesla CEO Elon Musk’s decision to suspend Bitcoin payments for cars and his further BTC criticism:

“We saw the market collapse. Initially, when Elon Musk tweeted around the time when we said our banking and payment facilities are no longer available for cryptocurrency transactions, and he tweeted that he will invest $1.5 billion, and the price went up. He now tweeted and raised a few concerns, and the thing plunged.”

The CBN did not immediately respond to Cointelegraph’s request for comment.

As previously reported, Nigeria has emerged as the biggest source of Bitcoin trading volume in Africa as of August 2020, also becoming one of the fastest-growing crypto markets in the world. According to data from Bitcoin P2P marketplace Paxful, Nigeria ranked second only to the United States in trading volume as of December 2020.

Amid the growing adoption of Bitcoin, Nigeria’s national currency, the naira, has been falling. “Bitcoin has made our currency almost useless or valueless,” Senator Sani Musa of the Niger East Senatorial District said in February. Following Emefiele’s latest remarks, the naira dropped 1.2% to near a three-and-half year low on the black market on Thursday.

By Helen Partz

Coin Telegraph

Wednesday, May 19, 2021

Nigeria is quietly rewriting fintech’s rulebook

It all started with a tweet on New Year’s Day, 2016. Joshua Chibueze, a computer scientist and entrepreneur based in Lagos, Nigeria, floated the idea of digitising the kolo, a wooden box similar to a piggy bank, used in many Nigerian homes to save money.

Chibueze had heard that, with enough persistence, people could set aside significant sums, but when he started using a kolo himself he realised how easy it was for upwardly mobile young Nigerians like him to forget – or simply lack the discipline – to save every single day. Worse: as Nigeria’s economy was getting increasingly cashless, an old box did not sound like an effective saving device – and was a security liability.

Hence the idea of a digital kolo. Odunayo Eweniyi, a fellow entrepreneur (and Twitter friend of Chibueze’s), was the first to reply to his tweet on the subject. “The conversation progressed from digitising to automating the kolo,” Eweniyi recalls. The pair teamed up and – alongside a third co-founder, Somto Ifezue – built an online savings platform to help medium-to-low-earning Nigerians save small amounts daily, weekly, monthly, or annually. Launched as PiggyBank.ng in February 2016, today it is known as PiggyVest.

Marketing solely on social media for the first couple of years, PiggyVest was able to help Nigerians sign up easily using their smartphones, automate savings and earn interest, with rates between six and ten per cent. By the end of 2018, PiggyVest had helped over 53,000 users save close to a billion Nigerian naira (£2,000,000).

In 2015, two per cent of Nigerians controlled 90 per cent of banks’ total deposits, according to the Nigeria Deposit Insurance Corporation, a government-backed financial agency. One year later, Nigerian financial inclusion advocacy group EFInA found that only 36.9 million adult Nigerians – out of a population of over 195 million – had access to a bank account. Nigeria was grappling with a huge unbanked population and PiggyVest set to cater to this demographic blending technology and traditional saving methods.

“The thing about the unbanked is that they’re actually banked, they’re just not formally banked,” says Eweniyi. “Banking is necessary to them but the banks themselves haven’t proven to be.” She believes that Nigeria’s financial exclusion problem will be solved by working with people rather than offering top-down solutions.

That is why Piggy`vest has decided to borrow well-tested models from Africa’s financial history: after its debut as a digital kolo, in May 2018 the company launched a new feature – called Smart Target – modelled af

ter the traditional saving practice of ajo. First recorded in the 19th century, but rumoured to have been around for longer among the Yoruba ethnic group, an ajo consists of a group of colleagues, friends, or religious peers, each contributing the same amount of money at an agreed frequency to hit a financial target. At the end of each savings cycle – typically, a month – one member of the group receives the entire saving pot; the ajo goes on until everyone has received their payout.

“My mum belonged to at least four ajo groups, one of which was at the university where she was a lecturer,” says Eweniyi, whose parents were both academics. “My parents relied on ajo to pay their way through our education and this is how most middle-class families I know survived.”

PiggyVest’s take on ajo, however, tweaks the tradition to fit the times: Smart Target lets people save towards a common goal together as an online community, but unlike ajo, users are in control of how much they contribute and where the payout goes.

PiggyVest is just one of a new breed of Nigerian fintech companies. “Companies like PiggyVest have moved to push savings and budgeting consciousness, by gamifying the process and including a reward system for users who follow through,” says Modupe Odele, a lawyer and startup consultant based in Washington, DC. She predicts that in the near future, Nigeria’s fintech industry will start broadening its scope.

“We have payments, we have savings and these are great, but there's still a lot of financial technology that is ripe for exploration,” Odele says. 

By Kiki Mordi

Wired

Related stories: Nigerians Are Using Bitcoin to Bypass Trade Hurdles With China

Why Bitcoin has been so successful in Nigeria

The re-inventors of banking in Nigeria

Wednesday, May 12, 2021

Video - Nigeria's booming investment in cryptocurrency continues despite ban

 

Global cryptocurrency trading platform Paxful recently announced that Nigeria had become the biggest market for bitcoin and cryptocurrency on its exchange despite the imposition of restrictions on trading in cryptocurrencies by the Central Bank of Nigeria. Kunle Lawal says he has made a fortune from the trade encouraging him to educate and train people in his community about how to go about it. He, however, cautions people to make informed decisions before getting involved in the trade, in addition to not committing all their money into one pot.

Related stories: Nigeria’s crackdown on Bitcoin echoes global crypto conundrum

Bitcoin ‘Can’t Be Stopped’: Nigerians Look to P2P Exchanges After Crypto Ban

Nigeria is forging on with crypto despite regulatory hurdles

Wednesday, April 14, 2021

The NFT Craze Is Helping Nigerian Artists Go Global

In March, Oyindamola Oyekemi Oyewumi, a 24-year-old Nigerian artist who creates portraits using ballpoint pens, tweeted her drawing of Ethereum co-founder Charles Hoskinson.


Hoskinson noticed the tweet and put it up for sale as a non-fungible token (NFT), or one-of-a-kind digital item with its own digital signature. By the end of the month, the tweet sold for $6,300 and now it’s Hoskinson’s Twitter profile picture.

“Luckily for me, Hoskinson himself told me about NFTs. He gave me a link to read about NFTs and, after reading about it, I decided I want to try it out,” Oyewumi told CoinDesk. Last week Oyewumi sold the first NFT she minted by herself on Mintable, and a friend helped her convert her crypto earnings to the local naira currency.

NFTs are all the rage this year, especially after the artist Beeple sold a digital art collage for $69.3 million through the British auction house Christie’s in March. Christie’s also announced Thursday it will be selling nine NFT collectibles known as CryptoPunks. This month, American-Senegalese R&B singer Akon launched AkoinNFT, an NFT platform to “supercharge and empower” artists and brands.

Now the trend has spread to Nigeria, where local financial institutions are banned from servicing crypto firms. This means Nigerians cannot convert digital assets to naira through traditional crypto exchanges. But that hasn’t wiped out crypto in Africa’s largest economy, thanks in part to its young and tech-savvy population. Users began switching to peer-to-peer platforms to avoid using banks and the use of crypto continues, as evidenced by how local artists like Oyewumi are embracing NFTs.

Although more Nigerian artists are entering the NFT space, they do so wary of the hype. Some Nigerian artists told CoinDesk that although minting their artwork comes with a number of advantages, they have concerns about the impact of NFTs on the art world in general.

Only good for already-established artists

Oyewumi feels the NFT culture is only beneficial to those artists who already have a large fanbase.

“If I put my art up as NFTs, sure, lots of people will see it. But some people will still prefer to purchase work from artists they already know. People might end up just creating pieces and uploading but not be able to sell anything,” Oyewumi said.

For instance, NFT art collector Michael Ugwu typically likes to check out an artist’s online presence and work before purchasing his or her art. A London-based music executive and entrepreneur of Nigerian descent, Ugwu owns around 40 NFT pieces by artists from around the world, including Nigeria. Ugwu told CoinDesk he only buys art he loves, but there is also a business perspective to consider.

“I also want to know that there’s going to be a global marketplace for that piece, if I want to sell it on the secondary market. It’s much easier to sell a Fewocious, a Billelis or if you get lucky and get your hands on a Beeple. So based on those factors, from African artists I primarily acquire work that I feel has a global audience,” Ugwu said.

He added that for some African artists, minting their first pieces could be a challenge due to the Ethereum gas fees sometimes needed to sell an NFT.

“It’s not cheap. A typical African artist may or may not have the $100 or $200 it’s going to cost them per piece. So that’s a small barrier,” Ugwu said, adding there are some platforms that waive or subsidize the minting fee.

Oyewumi feels new artists may also struggle with pricing their pieces and end up selling their art for less than what it’s worth.


All about the money

One NFT art piece in Ugwu’s collection is by the acclaimed Nigerian digital artist Osinachi.

Osinachi, 29, has made a name for himself as a digital artist and produces most of his work using Microsoft Word. When he first started making art in the late 2000s, his primary goal was to see his work displayed in a traditional art gallery. Over the years Osinachi reached out to numerous galleries but received no response.

Then he discovered crypto art.

In 2017, Osinachi learned people were posting artwork as NFT collectibles. With some help from the community, Osinachi minted a few of his works. In 2018, his art was featured in the Etherealblockchain summit in New York.

The following year Osinachi’s dream came true when he was invited to show his work at a contemporary art gallery in Switzerland. In 2020, his art was featured in CoinDesk’s “The Most Influential People in Crypto” list. The same year, he quit his job as an academic librarian at the University of Nigeria Nsukka to focus on his art full time. A month ago he sold one of his digital paintings, “Am I pretty?,” for 13.2 ETH (+5.85%) (around $27,600 as of Friday).

“A single NFT sale can translate to my one-year salary when I was working at the University of Nigeria,” Osinachi said.

Now, he is helping other Nigerian digital artists mint their work. Osinachi told CoinDesk that thanks to the NFT gold rush, digital artists like him are getting the attention they deserve and (thanks in part to the Beeple sale) learning that digital art can be priced as high as or higher than traditional art.

But he is also concerned about aspects of the traditional art world flooding the NFT space.

“Now, you also see marketplaces paying attention to certain big names. They care about the big artists that would make huge sales, and not necessarily about the art that is being made,” Osinachi said.


Tricky

Oyewumi, who set up her NFTs by herself, found the process to be complicated and experienced a number of unfamiliar technical issues.

She also saw a colleague’s art minted without the artist’s knowledge or permission. As NFTs went viral, scammers took to minting other artists’ work. In early March, illustrator Derek Laufman lashed out at NFT platform Rarible when a Twitter user notified him his art was listed on the website for sale without his knowledge.

Anthony Azekwoh, a 21-year-old chemical engineering student and digital artist, minted his first NFTs last month but finds the NFT space quite “tricky.”

“It’s been very complicated for me as a Nigerian. I come from a place where you make money through years of hard work, but with the NFT space it’s a situation where in a single minute you’re making millions of naira. I feel like the relationship most Nigerians or most people from places like Nigeria would have with the NFT space is, ‘Wow, how does any of this work? How is it possible?’” Azekwoh told CoinDesk.

But it’s not all bad.

Like Osinachi, Azekwoh is wary of the focus on monetization in the NFT world and determined to help other Nigerian artists. With his NFT earnings, he has set up a fund that pledges 200,000 naira to young local artists between the ages of 15 and 25.

Ugwu believes that although the NFT space in Nigeria is still small, it has the potential to propel Nigerianartists to the global stage if local digital art curators emerge in the coming years.

There are “a lot of great artists out of Africa, and Nigeria, who are focused on physical work, and I’m all for them getting a better understanding of the opportunities of NFTs,” Ugwu said.

Despite the many complexities, younger artists like Oyewumi and Azekwoh, inspired by veterans like Osinachi, are slowly working out the kinks and establishing themselves as global artists of the digital era.

NFT newcomer Oshomah sold his first multimedia artwork two weeks ago and has minted his second. Oshomah said that at the moment he could probably only name 10 Nigerian NFT artists, but there are hundreds of talented artists who, with some help, can enter the space in the months and years to come.

“You will see a lot of artists come out of Africa [who] will give Beeple a run for his money,” Oshomah said.

By Sandali Handagama

Coindesk

Related stories: Nigerians Are Using Bitcoin to Bypass Trade Hurdles With China

In Nigeria, One Bitcoin Can Cost $68,000. Here’s Why

Why Bitcoin has been so successful in Nigeria

Friday, March 26, 2021

Nigeria’s crackdown on Bitcoin echoes global crypto conundrum

Lagos, Nigeria – When the Central Bank of Nigeria (CBN) issued a circular in early February warning banks and financial institutions that “facilitating payments for cryptocurrency exchanges is prohibited” and that they needed to identify and close accounts associated with them, it set the country’s crypto community alight.


“I was in a danfo [a yellow public transport bus that operates in Lagos] heading home when my phone started buzzing with WhatsApp notifications regarding the CBN ban on cryptocurrency transactions,” said David Akinwale, a 25-year-old financial analyst who trades in cryptocurrency. “It was really disappointing and sad. While other countries are embracing the use of Bitcoin and cryptocurrency, Nigeria is doing the reverse.”

This week, a representative for Nigeria’s central bank chief Godwin Emefiele reportedly sought to clarify the February 5 directive, telling reporters that it was not aimed at discouraging people from trading in cryptocurrencies like Bitcoin, but served to enforce orders in place since 2017 banning crypto transactions in the country’s banking sector.

But the 2017 directive did not prohibit crypto exchanges from using banking and payment channels. It simply required banks and financial institutions to ensure that their crypto-exchange customers have effective anti-money laundering and “anti-terrorism” financing controls in place.

The backlash and confusion echo a crypto-drama unfolding around the world as virtual currencies like Bitcoin grow in popularity and scale new heights during a time of unprecedented financial uncertainty stemming from the coronavirus pandemic, as well as uniquely domestic challenges.

In the United States this week, Federal Reserve Chairman Jerome Powell raised concerns about the role cryptocurrencies play in facilitating criminal activity, as well as their infamous volatility, calling Bitcoin “more of an asset for speculation” than a substitute for the US dollar.

In Iran, officials recently targeted crypto exchanges and even pinned blamed for high levels of air pollution on Bitcoin mining.

The developments illustrate the regulatory conundrum governments face with crypto assets that by design are intended to be decentralised and beyond their reach, but which are part of a rapidly evolving sector of global finance that pivots on innovation.
 

Africa’s biggest Bitcoin market

Nigeria is Africa’s largest economy, its most populous country, and home to one of the youngest populations in the world. Throw in a burgeoning tech sector and it’s easy to see how Nigeria has become the continent’s largest Bitcoin market by trading volume, according to UsefulTulips.org, which gathers data from crypto exchanges Paxful and LocalBitcoins.

That ascent to Bitcoin prominence is rooted in a sharp fall in remittances during the pandemic, as well as the country’s state coffers and local currency, the naira, being ravaged by the twin blows of COVID-19 restrictions and plummeting crude prices.

In an effort to keep increasingly scarce US dollars from leaving the country last year, some Nigerian banks reportedly placed curbs on offshore debit card transactions and limited cash withdrawals.

Against this backdrop, Bitcoin and other cryptocurrencies soared in popularity last year, as both a hedge against the eroding purchasing power of the naira, as well as a way to move money around more easily.

‘With Bitcoin, I could bypass the $100 limit on my naira debit card and do all my transactions seamlessly,” Bola Williams, a 33-year old software developer, told Al Jazeera. “But the ban on crypto has now made it even more stressful.”

But it does not appear to have curbed appetites for crypto. Bitcoin trading volumes on Paxful and LocalBitcoins topped $9m in the seven days ending March 8, according to UsefulTulips.org, compared to roughly $7.55m in the seven days ending February 8.

The data suggest that despite the CBN directive, Nigerians are determined to leverage cryptocurrencies to increase their earnings, especially with rising inflation and limited access to foreign exchange liquidity.

“The ban was never going to stop a ship that is far gone on sail,” Eric Annan, co-founder of cryptocurrency trading platform KuBitX, told Al Jazeera.

Annan said if anything, the CBN directive only served to amplify the popularity of Bitcoin and pique the curiosity of crypto sceptics.

“No single government can stop an idea whose time has come to a generation who have added to the GDP [gross domestic product] of the internet,” he said.
 

Political pushback

The CBN directive also met pushback from some Nigerian politicians.

After the order was released, the Nigerian Senate summoned CBN chief Emefiele to explain the opportunities and threats cryptocurrencies pose to the nation’s economy and security.

During the February 23 briefing before the Senate Committee on Banking, Emefiele highlighted the role cryptocurrencies play in money laundering, “terrorism” financing, illicit arms purchases, and tax evasion.

“Cryptocurrency is not legitimate money because it is not created or backed by any Central Bank,” Emefiele said. “It has no place in our monetary system at this time and cryptocurrency transactions should not be carried out through the Nigerian banking system.”

That assessment drew criticism from crypto proponents.

“Whatever reason that necessitated the move for the current restriction of banking services to crypto traders and exchanges by the CBN could have been resolved through dialogue and collaboration,” Chimezie Chuta, the founder/ coordinator of the Blockchain Nigeria User Group, told Al Jazeera.

“In saying that ‘cryptocurrencies are not legitimate money’ he obviously has forgotten the origin, what money is, and its purpose,” he added, noting that “cryptocurrency is a property or commodity and thus not an illegal asset class.”

Nigeria’s Vice President Yemi Osinbajo has also called for a less heavy-handed official approach – one that would vigorously regulate cryptocurrency transactions to address serious concerns “without necessarily killing the goose that might lay the golden eggs”.

“We’ve seen in many other sectors disruption makes room for efficiency and progress,” he said.

Al Jazeera

Related stories: Nigeria is forging on with crypto despite regulatory hurdles

Bitcoin ‘Can’t Be Stopped’: Nigerians Look to P2P Exchanges After Crypto Ban

Nigeria is Bitcoin Leader in Africa, Says Paxful

Friday, March 5, 2021

Why Bitcoin has been so successful in Nigeria

Back in 2017, the idea of Bitcoin in Nigeria was an interesting one that generally got the attention of two main categories of people: the early adopters with an interest in emerging technologies and the “hustlers” that are always on the lookout for new ways to make money. The latter category consisted of the same people that turned to the Mavrodi Mundial Movement (MMM), one of the world’s largest Ponzi scheme, when it became popular in 2016.

Unfortunately, the average Nigerian has struggled greatly in the country’s current economy, and many have been forced to seek out alternatives that offered tangible opportunities to make money. When cryptocurrency exchanges started to show up in Nigeria, they made buying and selling bitcoin more convenient for these categories of people, because the alternative was to buy bitcoin from a stranger with no assurance of getting what you paid for. And, as a result, the country’s cryptocurrency community began to grow.
 

BITCOIN’S RISE IN NIGERIA

The booming cryptocurrency market in Nigeria today has come a long way from those early days as the adoption rate in Nigeria, Africa’s largest economy, keeps growing year after year. A major reason for the exponential growth of the Nigerian cryptocurrency community can be linked to the country’s predominantly young population — it is significantly more tech-savvy than its parents, and it has taken to the internet in hopes of finding jobs and income that often prove fleeting at home.

Understandably, the young population went digital in its pursuit of a better life. Many younger Nigerians became freelancers in their chosen fields and started offering their services to the international community where their work is valued. But, once again, the challenge of getting paid for their work because of their location was difficult. In the same vein, Nigerians in the diaspora also experienced a similar challenge when sending money back home, as exorbitant charges from foreign banks and money transfer companies discouraged many from doing so.

Meanwhile, things kept getting worse for the average Nigerian, with the naira experiencing incessant inflation, making the country’s fiat a poor store of value; traditional banks charging ridiculous fees for simple transactions; and a rise in the unemployment rate. In the midst of all of these issues, the gospel of Bitcoin kept spreading as the foremost cryptocurrency’s major features made it look like it was specifically designed to save Nigerians.
 

WHY BITCOIN IS SUCCESSFUL IN NIGERIA

Bitcoin’s decentralized features, its ability to furnish cheaper and faster transactions and its rising value ultimately turned the attention of many Nigerians to it, so that in a 2020 COVID-19 halted world, Bitcoin had finally found a home in Nigeria. And this reflected in the numbers, as our cryptocurrency exchange, Yellow Card, processed over $200 million in cryptocurrency volume in 2020, with most of that volume coming from Nigeria. Blockchain.com also reported that there was an increase from Nigeria in the number of new Bitcoin wallets created on its platform.

Bitcoin offered the glimmer of hope that many Nigerians desperately needed as they could finally see the chance of attaining financial freedom to be more likely than ever. And, in the following ways, Bitcoin has become successful in Nigeria:


1. As a store of value: The naira’s continuous inflation has made many lose confidence in keeping their hard-earned money in fiat. Bitcoin offers a better alternative as its adoption across the world increases, thus driving up its demand and, consequently, its price.
2. As a better investment alternative: Many Nigerians have turned to trading and investing in bitcoin as a form of passive income and, despite the cryptocurrency’s volatile nature, the returns over time have seen many become millionaires.
3. As an enabler of easy transactions: The sending and receiving of money across the border for the payment of goods and services, or to loved ones, has never been easier with bitcoin, thanks to its cheaper network rate and faster transfer time than traditional remittance systems.

While a recent directive from the nation’s apex bank reiterating that regulated financial institutions are not authorized to offer services to cryptocurrency exchanges, the interest in Bitcoin has only continued to grow in the country as, coincidentally, institutional investments have propelled the price of bitcoin past $57,000, as of the third week of February.

It is, therefore, no longer a matter of if Bitcoin will continue to bloom in Nigeria, but a matter of how long before it reaches everyone in the country. The Central Bank of Nigeria’s directive may take some exchanges in the country offline for the time being, but peer-to-peer transactions, which have always been an extremely popular and active trading method in Nigeria, will only grow more quickly.

By Joel Ogunjimi and Chris Maurice

Bitcoin Magazine

Related stories: Bitcoin: Nigeria bites back against cryptocurrency trading

Video - Nigerian returns bitcoins worth $80,000

Nigeria is forging on with crypto despite regulatory hurdles

Nigeria Among Countries With Highest Crypto Usage Increase

Nigeria is Bitcoin Leader in Africa, Says Paxful

Wednesday, February 24, 2021

In Nigeria, One Bitcoin Can Cost $68,000. Here’s Why

Bitcoin has already passed the $68,000 mark in Nigeria, but that’s if you use the official exchange rate.

Awosika Ayodeji, a Nigerian blockchain project designer, isn’t complaining. He is happy to wake up and see bitcoin prices quoted using unofficial U.S. dollar exchange rates because it means he’d be getting more naira per dollar when he converts his crypto earnings to his local currency.

At the same time, however, “buying [bitcoin] becomes more expensive, too,” Ayodeji noted.

On Friday, Nigeria’s official exchange rate for the U.S. dollar was around 380 naira per dollar. Using this rate, a bitcoin listing on peer-to-peer platform LocalBitcoins in Nigeria of around 26,000,000 naira converted to $68,246. On the surface, this looks like a hefty 24% premium, which in this context refers to bitcoin’s price being much higher in specific locations than it is on average worldwide.

In Nigeria, these premiums aren’t consistent. On peer-to-peer platform Paxful, the listed bitcoin prices were based on $1 trading for around 475 naira. This rate converted to $54,736, a price much closer to the average bitcoin trading price of the day. In fact, the informal market dollar exchange rate in Nigeria on Friday was around 478 naira, reflecting the rate seen on Paxful and the bitcoin prices listed on LocalBitcoins.

In emerging markets that are facing a currency crisis, bitcoin prices can actually shed light on the informal market for U.S. dollars. In Argentina, Latin American crypto exchange Bitso listed the bitcoin price at 8,700,993 Argentinian pesos on Friday, which converted to a whopping $98,000 using the official exchange rate, which was around 89 Argentine pesos per dollar. But bitcoin listings on exchanges like Bitso indicated the dollar was worth around 150 pesos, reflecting the informal going rate for the dollar.

Yele Bademosi, chief executive officer at social payments app Bundle Africa said exchanges are most likely using informal dollar rates, thus inflating bitcoin’s price in local currency. According to Andrés Ondarra, country manager for Argentina at Bitso, the market exchange rate for the dollar is usually higher than the official exchange rate in Argentina as well.

“This is mainly reflecting the difference between the informal U.S. dollar rate and the official one. The gap between the official and the informal dollar in Argentina is around 70%,” Emiliano Limia, press officer at Argentine crypto exchange Buenbittold CoinDesk via an email.

Exchanges using informal rates instead of official ones indicate the local bitcoin markets exist outside of government rules, and that bitcoin trading might reveal the real value of the local currency against the dollar.

According to Gina Pieters, a professor of economics and the University of Chicago who published a paper on how bitcoin can detect exchange rate manipulation and capital controls, bitcoin premiums can occur for a number of reasons.

“It seems unlikely that the price should be that much higher unless there is the manipulation of the nominal exchange rate channel,” Pieters said in an email to CoinDesk, referring to the price of one currency in terms of another.

In fact, the thesis of Pieters’ 2016 paper was that bitcoin trading can be used to approximate unofficial exchange rates, “which, in turn, can be used to detect both the existence and the magnitude of the distortion caused by capital controls and exchange rate manipulations.”
 

Informal exchange rates

Due to the falling purchasing power of the naira, on any given day, Nigeria has multiple exchange rates for the dollar. The informal exchange rates are typically much weaker, with Nigerians having to dish out more naira per dollar, indicating the local currency may be worth less than what the government says.

According to a chapter in economist Koji Kubo’s book about Myanmar’s foreign exchange market, multiple exchange rates emerge within the unofficial market when governments implement “exhaustive exchange restrictions” or limitations on the amount of foreign currency that could be bought or sold.

In 2020, Argentina’s government imposed strict controls on the purchase of U.S. dollars, restricting the amount of dollars citizens could buy and hold to $200, in an attempt to stop capital from flowing out of the country. The dollar black market flourished as a result, with people scrambling to buy more dollars to protect their wealth, and even paying more pesos per dollar. This quickly spilled over to crypto as Argentines tried to ditch the peso for stronger currencies: demand for bitcoin soared in 2020.

Meanwhile, Nigeria’s facing a U.S. dollar shortage: in 2020, local media reportedNigerian banks were limiting the amount of dollars Nigerians can spend abroad to as low as $500. Thanks to the scarcity of dollars that could not meet local demand, the value of the naira fell in local informal markets as people showed willingness to pay more naira per dollar.

“The general market is now setting the price to $480 as that seems to be the present value generally accepted between buyers and sellers,” Ayodeji said.

The lower informal exchange rate can mean sending money to family in Nigeria or Argentina in bitcoin can be beneficial as one bitcoin can get you more of the local currency, but this also means that the purchasing power of the local currency is weakening. Sending money out of the country can be problematic, as your wealth converts to less dollars.

It’s typically difficult to estimate local informal dollar rates: Ayodeji said black market currency merchants might ask for even more naira per dollar. But bitcoin conversions can calculate a decent estimate, Ayodeji said.
Inflation

Still, premiums can exist even after you factor in the difference in exchange rates. One possible reason is, in countries with high inflation, people may be willing to pay more for bitcoin.

“In the euro area the prices are pretty much the same as spot prices in big centralized exchanges,” Jukka Blomberg, chief marketing officer at LocalBitcoins, said in an email. But “in countries such as Venezuela, there can even be quite big premiums.”

Blomberg explained this is because Venezuelans who are willing to sell their bitcoin in exchange for their local currency typically want a higher premium due to the risk they have to take by accepting a highly inflationary currency such as the bolivar. In Venezuela, where the inflation rate hit a staggering 10 million% in 2019, and the value of the bolivar was dropping almost daily against the U.S. dollar, people began turning to bitcoin. In fact, the local demand for bitcoin drove crypto adoption in Venezuela ahead of other hyperinflationary countries like Argentina.

Nigeria is also an inflationary country, and citizens have been turning to bitcoin to weather value drops in naira. Demand for bitcoin was so high that the central bank of Nigeria first ordered banks to shut down all accounts associated with crypto trading, and released a five-page explainer that said the measure was taken to protect the country’s financial system.

According to Ayodeji, the naira exchange rate on crypto platforms changed drastically the days after the ban was announced, perhaps driven by the panic that followed, and the demand for bitcoin dropping slightly: the unofficial exchange hit between 410 and 420 naira per dollar, Ayodeji said.

“But the market circled back,” he said. 

By Sandali Handagama

Related stories: Bitcoin ‘Can’t Be Stopped’: Nigerians Look to P2P Exchanges After Crypto Ban

Nigeria is forging on with crypto despite regulatory hurdles

Nigeria Among Countries With Highest Crypto Usage Increase

Nigeria is Bitcoin Leader in Africa, Says Paxful

Monday, February 15, 2021

Bitcoin: Nigeria bites back against cryptocurrency trading

Bitcoin. The currency of choice for drug dealers, terrorists, investors, spaceship enthusiasts — and ordinary people, including many of us who just want to get paid for an honest day’s work.


Bitcoin. Because of its decentralised nature, it’s almost impossible to control how it moves. Like any cryptocurrency, that’s a huge part of its appeal. And that’s also what makes it a threat.

Bitcoin. Not available in Nigeria. Try again later.
 

Get paid, pal

A few weeks ago, I was notified that payment for work I’d done had been made to a PayPal address I had provided. It wasn’t the first time — I’ve been working with this company for most of 2020.


It’s not easy to get your own Paypal account in Nigeria, so I had an arrangement with a friend who did have one: whenever I was paid she would transfer the funds to my Nigerian bank account, using a remittance service.

In this case, it was Transferwise, one of the international money transfer operators (IMTOs) many here on the continent and in the diaspora are already quite familiar with. Others include World Remit, Mukuru, Western Union and the like.

Most of these companies allow for cash pick-ups, or mobile-money deposits linked to your cellphone — or they can even deposit money straight into your bank account. They certainly could here in Nigeria … until two months ago.
 

No money, no problems

On 4 December, the Central Bank of Nigeria (CBN) announced a new policy that made it nearly impossible to make direct payments to Nigerian bank accounts using these remittance services.

The central bank’s announcement — widely thought to be in response to #EndSARS protests — instructed banks to limit all diaspora remittances to “domiciliary” accounts in the name of the beneficiary. This is a type of foreign currency account that allows the receiver to receive payments in non-Nigerian currency and exchange it to naira. But to get one of these accounts you need multiple references, as well as a $100 minimum deposit to set it up.

Without a domiciliary account, the bank could still pay you in foreign currency, but then you need to fill out forms and pick it up over the counter. And then it’s up to you to exchange it for naira: either at the bank, or on the black market if that’s your thing — with all the extra fees and criminal liability that entails.

The hassle really starts to outweigh the hustle, in other words. Which, I guess, was the point.

The central bank had other points to make: it also instructed banks to close all naira accounts opened specifically to receive inflow from IMTOs. In effect: no more remittance payments. This development has greatly troubled Nigerians in the diaspora trying to send money to their families, as well as those living in the country and earning in non-Nigerian currencies. Like freelance journalists writing for The Continent, for example.

Now, when you open Transferwise and attempt to make a transfer in naira you get the message, “sorry, we’ve closed all transfers to NGN due to new regulations from the Central Bank of Nigeria.”

Some other IMTOs have workarounds, like cash pickup, but it’s messy. Too messy, if you’re trying to run a legitimate business.

And, so, I was stuck. The work was done, the payment had been made — but I couldn’t access the funds. Eventually, however, I asked for help on Twitter, and so it was that bitcoin appeared on my radar.
 

Welcome to the global economy

Several people suggested I try SendCash Africa, which is owned by BuyCoins, a Nigerian app that helps Nigerians to buy and sell bitcoin and other cryptocurrencies with their Nigerian debit card.

According to Ire Aderinokun, a developer at BuyCoins, the company wants to put Nigerians on an equal footing with the rest of the world. ‘‘The core goal is to enable Nigerians and Africans to participate in the global economy,” he said. ‘‘For no one to be limited by their local currency.”

This is good news for ordinary people trying to make a living! For central banks responsible for managing local currencies? Not so much. Their job is to manage the economy, after all. And sometimes the responsibility to manage gives way to the urge to control.

During the #EndSARS movement, international donations were made to Nigerians who were at the front line or organising protests in their states, as well as to Feminist Coalition. At first, these donations were made using the IMTOs or remittance services.

But when the central bank began to “manage” the accounts of known #EndSARS activists, and issued its December limits on remittance mechanisms, Feminist Coalition created a bitcoin wallet, and bitcoin became the preferred way to donate to the protests, outside the central bank’s influence. This arguably made it possible for the #EndSARS movement to hold out for as long as it did.

So Feminist Coalition was receiving donations, and, thanks to a relatively straightforward sign-up process, I, too, was able to get paid at last.

Until last Friday. On 5 February, the central bank “banned” bitcoin, too.
 

Nigeria puts the ‘ban’ in ‘bank’

In a circular cautioning the public on the risks of transacting in crypto, the central bank informed banks that dealing in cryptocurrency was prohibited, and asked them to please send over a list of any individuals dealing in cryptocurrency — and close their accounts while they were about it.

The letter essentially banned crypto-dealing in Nigeria with immediate effect. I contacted the Central Bank of Nigeria to ask about its reasons for doing this, and how this might affect business, but no one got back to me.

However, according to Abubakar Idris, a financial journalist at Stears Business, the central bank is sticking to its story that blocking the trading of cryptocurrencies such as bitcoin is part of its strategy to prevent financial fraud and the financing of terrorist operations.

“These are legitimate concerns,” Idris told me. “Nigeria does have an infamous international status for scams and online fraud; and has been fighting the Boko Haram terrorist group for more than 10 years now.”

Nevertheless, he believes there are other motivations at play.

“The most crucial of all is CBN’s focus on stabilising the exchange rate. Cryptocurrency gave everybody — businesses and individuals — a way around currency issues, getting better exchange rates and rendering central control measures ineffective,” he said. “By making it harder for people to carry out cryptocurrency transactions, the CBN wants to take back control of the country’s international payment system.”

It worked. At the moment, the only way to transfer money to a Nigerian bank account requires the person receiving it to go to a bank to cash it. This method is easily controlled by the government — as was demonstrated during #EndSARS.

But cryptocurrencies have an irritating habit of bouncing back.
 

Here comes the bounce

In 2020, BuyCoins, the parent company of SendCash, processed crypto transactions worth more than $140-million, according to stats published by its chief executive, Timi Ajiboye. After the December crackdown, SendCash became a primary go-to for Nigerians abroad trying to send money home, and for remote workers and freelancers (including the odd journalist) to get paid.

However, with the new directive of 5 February, the company’s entire business model appears to have been dismantled, leaving many without an easy way to move money. And they’ve gone quiet. BuyCoin and other crypto companies have declined to speak to the press since the directive, so it isn’t yet clear what their next move will be. Crypto is nothing if not cryptic.

But many in the tech sector expect that they will innovate around it somehow.

‘‘Startups themselves are developing workarounds against the CBN’s policy,’’ Idris said. ‘‘In the next couple of weeks, things may feel weird and people may have to learn new ways to deposit money into their crypto wallets. But things will pick up after that. I don’t expect cryptocurrency trading to decline. I actually believe the CBN’s policy has made crypto more popular.”

By Vincent Desmond

Mail&Guardian

 

Related stories:  Video - Nigerian returns bitcoins worth $80,000

Nigeria is forging on with crypto despite regulatory hurdles

Nigeria Among Countries With Highest Crypto Usage Increase

Nigeria is Bitcoin Leader in Africa, Says Paxful