‘Larger number can provide financial services for unbanked’
Nigeria’s cryptocurrency market is estimated at over $400 million, with a significant portion of the population involved in cryptocurrency trading and transactions, the Director-General of Security and Exchange Commission (SEC), Emomotimi Agama, has said.
Speaking at the 2024 conference of the Association of Capital Market Academics of Nigeria (ACMAN), yesterday, in Abuja, the DG said the volume of the cryptocurrency market in the country would hit $52.5 million in 2028, indicating a 12.66 per cent increase from this year.
According to Agama, despite economic challenges, Nigeria has emerged as one of the leading countries globally in terms of crypto adoption and volume of transactions.
He said: “Reports indicate that Nigeria’s crypto transaction volume reached $56.7 billion between July 2022 and June 2023, representing a nine per cent year-over-year growth.
“The country’s crypto market is estimated to be worth over $400 million, with a significant portion of the population involved in the transactions.”
While disclosing that approximately 33.4 per cent of Nigerians own or use cryptocurrencies, the DG said the country could take advantage of the large number to further provide financial services for the over 38 million unbanked adults, noting that some people do not have bank accounts but have wallets.
Cryptocurrencies, he added, can also provide cheaper and more efficient methods of remittance for Nigerians in the Diaspora.
“Cryptocurrencies can significantly reduce remittance costs, with Bitcoin transactions cutting fees by up to 50 per cent. Nigeria is one of the largest recipients of remittances in Africa. Cryptocurrencies offer a more efficient and cost-effective way for Nigerians abroad to send money home. With traditional remittance fees often being prohibitively high, cryptocurrencies provide a cheaper and faster alternative,” he said.
However, he noted that despite the numerous advantages of the product, there are concerns about illicit activities, as highlighted by the Economic and Financial Crimes Commission (EFCC) with reported cases of crypto-related scams.
“Lack of a comprehensive regulatory framework has created uncertainty, which can deter investors and innovators. Cybersecurity threats, including hacking and fraud, pose significant risks. A substantial portion of the population lacks adequate financial literacy, making them vulnerable to scams and risky investments,” he explained.
Agama asserted that crypto assets present significant opportunities and challenges for the country’s economy, noting that a “balanced regulatory approach is essential” to harness their benefits while mitigating risks.
“Collaborative efforts from regulators, industry stakeholders and the public are crucial for developing effective regulations. I encourage continued dialogue and cooperation to ensure a secure and innovative financial ecosystem,” he said.
Chairman of SEC, Mairiga Katuka, remarked that crypto presented an advantage for the markets and urged all to chart a course forward for Nigeria with its vibrant financial markets.
Katuka added: “Together, we can drive the development of a vibrant, resilient capital market in line with President Bola Tinubu’s dream of making Nigeria a prime investor destination.
“Let us work together to build a capital market that does not only see the needs of today but also anticipates problems to find solutions before the issues arise.”