Nigeria Leads Africa, Ranks Third In Global Crypto Trading

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As block chain and crypto continue to revolutionise trade, investment and payments, Nigeria seems to be taking the lead in the ecosystem in Africa.

 According to a report by IC Intelligence Insights, “Of the top 10 countries trading cryp­tocurrency volumes, Nigeria ranked third after the US and Russia in 2020, generating more than $400m worth of transactions.”

In recent years, the in­dustry has continued to pro­fessionalise with increased regulatory oversight and insti­tutional banking and ground­breaking innovations such as Non-Fungible Tokens (NFT).

The awareness that finan­cial criminals are well into it, the financial regulator in Nigeria, the Central Bank of Nigeria (CBN) took some measures to strangulate the smooth operations of Bit­coin and other related instru­ments.

But there is a fast grow­ing consciousness that a cryptocurrency in a digital world may well be a logical next step, with digital money movements already having replaced lots of cheques and cash.

According to Dr. Desné Ma­sie, Chief Strategist & Editor of Insights Newsletter, IC In­telligence, “Bitcoin enjoyed a surprising surge of about 1,000% over the past year, more than quadrupling in value and outstripping stocks and gold, with Tesla’s $1.5 bil­lion Bitcoin purchase making headlines and many investors desperate to get-rich-quick in a world of uniquely low inter­est rates.

“With the trend of the seg­ment of the market, it may be of course that all money changing becomes digital in the end. Millennia ago it happened through barter­ing. Then progressed via metal items of exchange into currencies based on physical notes and coins. Followed by cheques and telex transfers, then interbank electronic exchanges. Now personal banking via Apps on mobile phones is widespread.

“In 2016, I was startled to witness in a Kampala open-air market impoverished women paying for bananas and vegetables on their mo­bile phones; stall holders standing in the dust were happy to accept money that way. And of course money exchange via mobile phone is now widespread in Africa, as well as elsewhere.

“Meanwhile, more cryp­tocurrency trading goes on in Nigeria than almost anywhere else in the world, reflecting a loss of faith in more traditional forms of in­vestment.”

However many Nigerians have reported that their bank accounts have been frozen due to cryptocurrency-re­lated activity. Some analysts have attributed the sanctions to the October crisis of #End­SARS protests which allegedly claimed many lives and the ris­ing insecurity in the country.

It is established that Bit­coin transactions generally happen on a Bitcoin exchange rather than being used by peo­ple buying or selling stuff (or at least legal stuff).

Bitcoin’s extreme volatility is often cited as a reason not to invest, but this is a nascent ascent class, and as such, its volatility is understandable.

According to an expert, “With the purchase of deriva­tives, you could even get some insurance protection against things going badly wrong. Bit­coin can work the same way. If you think it will simply go up and up, and you want to use it to transact – to buy say steel or rubber or the component met­als of batteries – by buying a finite number of US dollars today, it may mean you have increased the value by twice when you actually have to pay for the stuff. But remember that would only work for you if you can sell the Bitcoin when you need to.”

Meanwhile, billions across the world are not tech savvy enough to master any digital transfers, and a good number of them cannot afford mobile phone and online service charges, including over five million, mostly older, Britons.

Speaking further, the ex­pert said: “As for Bitcoin, ‘wait and see’ is my personal motto. Which may mean I lose out on the opportunity of a lifetime. But at least it will stop me hav­ing nightmares about losing everything.

“I am not a gambler. But for those who are, be my guest about Bitcoin.”

According to Twitter CEO Jack Dorsey, Africa is set to “define the future (especially the bitcoin one)”. His com­ments are just one example of the growing acknowledgment of the potential of cryptocur­rencies in Africa and whilst the majority of discussions on the global stage have been on investment, speculation and trading, Africa, more than any other continent, stands to gain most from the utility of cryptocurrencies.

One specific area this re­lates to is cross-border trans­actions. With the launch of the new Africa Free Trade Agreement (AfCFTA) earlier this year, the continent is be­coming increasingly intercon­nected and its financial sys­tem has to follow suit. People are no longer only interacting with those in their immediate circle and the effectiveness of the AfCFTA will hinge on quick and low-cost cross-bor­der payments. However, this is still a work in progress in Africa.

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Read the Source post on Independent Newspaper Nigeria.