Cryptocurrency Market driving Economic Growth in Nigeria
The growth of the cryptocurrency market in the Nigerian eco-space is expected to have a positive impact on the growth of the digital economy.
The digital economy has been experiencing a steady rise and entry into the cryptocurrency market. This is due to the steady rise in crypto technology by young Nigerians and start-ups, to pay for goods and services.
Nigeria’s digital economy grew by 15.09% in real terms in Q2 2020. This is almost double the 9.99% growth recorded in Q1 2020 and 9.01% in Q2 2019. This growth comes amid the disruption caused to the financial markets by the pandemic.
In Q1 2020, Bitfxt – a fast-growing Nigerian crypto-trading company, raised $15 million Series-A funding for the expansion of its operations. Bitfxt’s operations has created more jobs and investments in an economy in dire need of cash inflows.
The Lagos-based crypto startup permits consumers to buy and sell cryptos. Such macro shows how fast Nigerians are tapping into crypto technology thus entering into the cryptocurrency market. All these in turn is boosting Nigeria’s economy.
Otatade Happy, a Paxful Peer spoke on how the prevailing crypto evolution can further boost the Nigerian economy. Especially, with regards to payments and transactions.
“We know how difficult it is to send money from Nigeria to other countries. However, with crypto, payment can be made instantly without the hassles of queueing in the bank. I can also get money from abroad without stress. The fee to transfer crypto from one wallet to another is really small. Because of that, many people are entering into the cryptocurrency market in Nigeria. It is only a matter of time before the older generation accept it.”
Adaptation of Cryptocurrency
Unsurprisingly, a significant number of young Nigerians have started utilizing cryptos, in a bid to avoid the numerous challenges faced with the traditional money transfer services, such as high costs and slow speed, amongst others.
The cryptocurrency market prevailing in Nigeria’s economy is already printing successful startups. Based on reports, Nigerian-based cryptocurrency exchange startup, Yellow Card, raised $1.5million in seed capital. This funds were raised from the popular American venture capital firm, Andreessen Horowitz, and a fast-growing crypto hedge fund, Polychain. Aim of the seed capital is to push its reach across Africa’s vibrant cryptocurrency market.
Bottomline is that,
A significant number of Nigerians and start-ups are quickly adapting to arguably the most disruptive technology ever invented – Crypto. Consequently, the increased entry of Nigerian start-ups into the cryptocurrency market is pushing Nigeria’s economic growth. Especially, at a time when the Covid-19 pandemic has adversely affected Nigeria’s export earning product – Crude oil.
A few months ago, the Nigerian Securities and Exchange Commission (SEC), proposed a new set of rules aimed at regulating Crypto-tokens or Crypto-coin investments, when the character of an investment qualifies as securities transactions. This further highlights the importance of the cryptocurrency market to the Nigerian economy.