Nigeria’s cryptocurrency market worth over $400m – SEC

The Director General of the Security and Exchange Commission (SEC) Emomotimi Agama has said that Nigeria’s cryptocurrency market is worth over $400 million.

Speaking at the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria (ACMAN) in Abuja, with the theme ‘Crypto Assets and the Nigerian Economy: Implications for Financial Markets Regulation’, the SEC DG, the volume of the cryptocurrency market in Nigeria would hit $52.5 million in 2028, indicating a 12.66 per cent increase between 2024 to 2028.

According to Agama, despite economic challenges, the country 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 percent 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 cryptocurrency trading and transactions.”

While disclosing that approximately 33.4% of Nigerians own or use cryptocurrencies, the Director General said the country can take advantage of the large number to further provide financial services for the over 38 million unbanked adults. According to him, some people don’t have bank accounts but they have wallets.

He added that cryptocurrencies can also provide cheaper and more efficient methods of remittance for Nigerians in diaspora. 

“Cryptocurrencies can significantly reduce remittance costs, with Bitcoin transactions cutting fees by up to 50%. 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.

He, however, noted that despite the numerous advantages, challenges persist. He pointed out concerns over illicit activities, as highlighted by Nigeria’s Economic and Financial Crimes Commission (EFCC), which has reported cases of crypto-related scams.

According to him, regulatory uncertainty, security concerns and financial literacy pose a serious threat to crypto use.

“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,” he explained.

He asserted that Crypto assets present significant opportunities and challenges for Nigeria’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.

In his remarks, Chairman of the Securities and Exchange Commission, Mr. Mairiga Katuka said the introduction of crypto presents an advantage for the markets and urged all to chart a course forward for Nigeria with its vibrant financial markets.

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.

In his goodwill message, the Chairman, Senate Committee on Capital Market, Chief Osita Izunaso, said the country required effective crypto regulation to benefit from the gains of the market.

Izunaso said the absence of effective regulation on crypto currencies had exposed so many investors to fraud.

He called for synergy from all stakeholders to harness opportunities in the crypto space.

Prof. Uche Uwaleke, the President, ACMAN, said the conference was aimed at considering the possibilities of expanding the financial sector regulations.

Uwaleke said the conference would also explore ways to accommodate crypto assets within the regulatory space.

The highpoint of the conference was the conferment of awards on stakeholders in the finance and capital markets.