The Director General of the Security and Exchange Commission (SEC), Emomotimi Agama, has projected that Nigeria’s cryptocurrency market will reach $52.5 million by 2028.
Agama shared this prediction during the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria (ACMAN) held in Abuja, with the theme ‘Crypto Assets and the Nigerian Economy: Implications for Financial Markets Regulation.’
Speaking at the conference, Agama highlighted the market’s potential amidst significant economic and regulatory challenges.
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He revealed that Nigeria’s cryptocurrency market is currently valued at over $400 million, with a substantial portion of the population engaged in crypto trading and transactions.
“The volume of the cryptocurrency market in Nigeria would hit $52.5 million in 2028, indicating a 12.66% increase between 2024 to 2028,” he noted.
Despite the economic hurdles, Nigeria has positioned itself as a global leader in crypto adoption and transaction volumes. Reports indicate that Nigeria’s crypto transaction volume soared to $56.7 billion between July 2022 and June 2023, marking a nine percent year-over-year growth.
Agama noted the high adoption rate, with approximately 33.4% of Nigerians owning or using cryptocurrencies. He pointed out that this presents an opportunity to extend financial services to the over 38 million unbanked adults in the country.
“Some people don’t have bank accounts but they have wallets,” he said.
Crypto’s Potential in Remittance and Employment
Agama also noted the role of cryptocurrencies in reducing remittance costs for Nigerians abroad. He explained that Bitcoin transactions could reduce remittance fees by up to 50%, providing a more efficient and cost-effective alternative to traditional remittance methods. This is particularly beneficial for Nigeria, 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,” Agama stated.
Moreover, the burgeoning crypto market has served as a significant source of employment, particularly for the youth. Economists argue that the sector should be allowed to flourish under the regulation of the SEC, as it has provided numerous job opportunities and driven financial inclusion.
The Chairman of the Securities and Exchange Commission, Mairiga Katuka, highlighted the potential benefits of cryptocurrency for Nigeria’s financial markets. In his address, Katuka acknowledged that the introduction of crypto assets offers significant advantages. He called on stakeholders to take proactive steps in harnessing these opportunities to propel Nigeria’s financial markets forward.
“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 the problems of tomorrow with a view to finding solutions before the issues arise” he added.
Government Apathy and Economic Sabotage
However, the Nigerian government’s stance on cryptocurrencies has been largely apathetic, if not obstructive. The Central Bank of Nigeria (CBN) has taken stringent measures to curb the operations of crypto exchanges. In particular, the CBN has blocked the operations of major platforms such as Binance and P2P trading networks, citing concerns over illicit activities and financial stability.
Critics argue that the government’s restrictive policies amount to economic sabotage. They note that by stifling the growth of a sector that offers significant economic benefits and employment opportunities, the government is inadvertently hampering the country’s financial progress.
The lack of a supportive regulatory framework has created an environment of uncertainty, deterring both investors and innovators.
Agama acknowledged these challenges, pointing out concerns over illicit activities and financial scams associated with cryptocurrencies. The Economic and Financial Crimes Commission (EFCC) has reported multiple cases of crypto-related fraud, underpinning the need for robust regulatory measures.
“The lack of a comprehensive regulatory framework has created uncertainty, which can deter both 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,” Agama explained.
He asserted the importance of a balanced regulatory approach to harness the benefits of crypto assets 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.