“Bitcoin has come to stay,” Johnson Okebiyi, tech and blockchain expert said. “Time Nigeria adopts cryptos to stabilise the economy,” he said.
Okebiyi’s assertion is hinged strongly on the belief that the future of money is digital and that cryptocurrencies, and Bitcoin, in particular, will drive that future.
It is illegal to trade, officially, in cryptos in Nigeria. A bad move by the country’s financial regulators, analysts believe.
The country’s naira continues to deteriorate against major currencies of the world. Adopting cryptocurrency and regulating it is the way to go to stop the free fall of the naira.
Unofficially, Nigeria is a leading cryptocurrency market in Africa and second in the world, after the US.
According to data by Statista, Nigeria is the leading country per capita for Bitcoin and cryptocurrency adoption, with nearly one in three survey respondents indicating they used or owned crypto assets in 2020.
Cointelegraph reported that Bitcoin was trading at a 36% premium in Nigeria before the government clampdown.
Yet, the country continues to lead in Bitcoin trading.
“The people of Nigeria will lead bitcoin”, Twitter CEO, Jack Dorsey said, raising hopes that the country will adopt Bitcoin in the near future.
During the EndSARS protest in 2020, organisers raised money for the protest through Bitcoin.
Doesey helped galvanise Bitcoin donation to the movement after the Nigerian government blocked the payment gateway through which funds were given to the EndSARS organisers.
“Please donate Bitcoin to help #EndSARS,” Dorsey had tweeted.
“This is indicative that critical infrastructure in the country can be funded through Bitcoin and other cryptocurrencies,” Okebiyi said.
“I…urge the Nigerian government to pursue economic independence and financial sovereignty by pursuing a national Bitcoin standard.
“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,” Russell Okung, a United States-based Nigerian said in an open letter to the Nigerian government.
Okung said countries such as Iran, Russia, China and Kenya have adopted national policies on Bitcoin trading.
He said these countries have been able to manoeuvre economic hardships to fund critical infrastructure in their respective countries through national policies on Bitcoin.
“Other nations like Barbados, Singapore and Malta have moved to become “bitcoin-friendly” to attract wealth and human capital through migration. And this week, El Salvador became the world’s first nation to require merchants to accept bitcoin as legal tender.”
Like every other tech, Nigeria is dragging its feet, as it did in adopting debit cards for transactions.
El Salvador is swiftly moving to adopt Bitcoin. It now requires that traders accept Bitcoin as a legal means of payment for goods and services.
What this means is that El Salvador can track and regulate Bitcoin as citizens exchange Bitcoin for the country’s currency.
“Bitcoin is not controlled, managed or operated by any single entity. It is an innovation that will surpass the automobile or the internet in terms of its impact on humanity.
“Nigeria does not need to ask for permission from any other nation nor acquire a license nor secure a trade agreement from any corporation to reshape its economy with Bitcoin. All that is required is a vision for a new future and an allocation of its own national resources to pursue a Bitcoin standard,” Okung said.
Nigeria had said it would launch digital currency before the year ends.
“It will still be pegged to the ever-depreciating naira and that is not what we are advocating for,” Okebiyi said.
“Peg the naira to the Bitcoin and see the economy blossom,” says Okebiyi.
A safe haven for criminals?
One of the reasons given by the Central Bank of Nigeria for restricting cryptocurrency in the country is that it is used for money laundering and terrorism.
Okebiyi said the country should not just throw its hands up in defeat but find a way to plug illicit flows of cryptos.
“That is where ingenuity is required. There are crypto exchanges and wallets. You need to license and regulate them to minimise illicit flows. No country in the world has been able to completely stop money laundering,” he said.
EFCC Chairman, Abdulrasheed Bawa, said that the commission keeps cryptocurrency loot recovered from internet fraudsters in the Commission’s e-wallet.
The EFCC chief said the commission had about $20 million worth of recovered cryptocurrencies in its e-wallet.
According to him, cybercriminals who used international money transfer platforms like MoneyGram and Western Union in the past now use digital currencies to get the proceeds of their dubious transactions.
“We have seen time and time again where cybercriminals are using this avenue to get their proceeds of crime. Before it used to be through money transfer agencies like money gram and, of course, Western Union. Now, they have gone electronic.
“They will defraud somebody. They will get gift cards and exchange them on the dark web, and they will use the proceeds to buy crypto, and they can get it to their e-wallet, and then, of course, they can sell and get their money,” Mr Bawa explained.
Speaking further, he noted, “As it is today, we have about $20 million worth of cryptocurrency as of last statistics that I have because we also created our e-wallet to recover cryptocurrency you know it has never happened before but we created it we are now recovering these proceeds of crime from that means as well.”
Bawa’s assertion means cryptocurrencies can be tracked and regulated. Conventional currencies too have loopholes that criminals exploit.
“You see people move funds in the guise of project financing. What you have is either pure terrorism financing or money laundering,” Okebiyi stressed.
But Kalu Aja, personal finance expert, said Nigeria’s apex bank needs to work with developers to make a stable digital currency in Africa.
“If CBN works with Nigerian fintech and banks, they build an ecosystem that issues a stablecoin that will be in demand across Africa because all Africans will use it to send money home.
“At zero cost on a standard created by Nigerians. If Nigeria does not do it, Kenya will,” he said on social media.