Nigeria emerges as global bitcoin leader despite regulatory hurdles

Nigeria has ranked second globally in interest for Bitcoin, trailing only El Salvador, according to recent data from Google Trends.

The West African nation remains the top Bitcoin adopter in Africa, with a significant lead over other countries on the continent.

A study by CoinGecko highlighted Nigeria’s continued dominance in digital asset engagement, including cryptocurrencies like Bitcoin and Ethereum. In 2023, Nigeria is projected to control 658.8% of Africa’s cryptocurrency market, nearly eight times that of any other African nation.

This leadership is partly driven by the country’s youthful population, with 43% of its 223 million citizens under the age of 15, according to the United Nations.

Despite a challenging regulatory landscape, where the Federal Government prohibits banks from working with unlicensed virtual providers, Nigerians increasingly use cryptocurrencies for transfers and savings.

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Stablecoins like USDT are becoming particularly popular for payments among businesses and the diaspora. Nigerian tour operators now commonly quote prices in U.S. dollars and accept USDT as a payment method.

Bitcoin has performed well in 2023, with a 42% return so far. However, cryptocurrencies are still not widely used for everyday payments in Nigeria, despite their rising popularity for fund transfers.

As other countries like the UK, UAE, and Brazil become more accepting of cryptocurrencies, Nigeria risks losing ground in the global crypto market.

The Federal Government has taken legal action against major cryptocurrency exchanges like Binance, and OKX has recently withdrawn from the Nigerian market. In addition, Binance stopped offering Naira peer-to-peer (P2P) transactions earlier this year. Despite these setbacks, Nigeria aims to tap the cryptocurrency market for tax revenue, with platforms like KuCoin now charging a 7.5% value-added tax (VAT) on transaction fees.

The 2022 Finance Act imposed a 10% tax on capital gains from digital assets, but these provisions have yet to be implemented.

Nigerians have increasingly turned to dollar-backed stablecoins as the economic situation worsens. Unofficial exchange rates on platforms like Binance have contributed to the decline in Naira value.

Despite economic challenges, the Nigerian Securities and Exchange Commission (SEC) recently granted two cryptocurrency exchanges, Quid