Crypto adoption and the use of Bitcoin ATMs in Nigeria seems to be growing at a very fast pace. It is evident that Bitcoin and cryptocurrencies are ready to explode in Nigeria. Over the past 90 days, Bitcoin and crypto adoption has surged sharply in Africa's largest economy, Nigeria. A strong proof of this trend is that in the last three months Nigeria has topped the charts in Google Trends for searches of the word 'Bitcoin' and 'Crypto'.
Countries that searched for the word Bitcoin the most
Countries that searched for the word Crypto the most
A large driver for this trend is the mobile revolution happening in the country. As more and more Nigerians have access to the internet through cell phone devices, online banking has grown exponentially. The problem is that there is still a sizable portion of the population that remains unbanked. This could be due to distance or lack of government identification, crucial to opening a bank account.
Enter crypto, any person with a mobile internet connection can create a web wallet and buy cryptocurrencies. The barriers to do so are considerably lower than in the traditional banking sector. The appealing properties of blockchain transactions have attracted many adopters in Nigeria and Africa in general.
In Nigeria the driving force behind adoption is Bitcoin. The oldest crypto coin is the most popular in the country. According to data from the site UsefulTulips, Nigeria tops the charts in BTC trading in the African continent. In the second quarter of 2020 trading in peer-to-peer (p2p) markets by Nigerians reached 34.4 million dollars. More than doubling the second place, South Africa, with a total volume of 15.2 million dollars for the same period.
The signs are encouraging in Sub-saharan Africa at large. The region has seen a BTC trading volume of 95 million dollars in the same period. This is a historic record for this part of the world. As more and more people have jumped on the trend, growing the cross-regional market for digital gold.
The adoption of the p2p model in the country is on the rise. This is because it relies on two willing parties trading in a safe platform without the need for a central authority. As more Nigerians enter the market of cryptocurrency trading. It has become a widely accepted form of making income and is on its way to rival traditional money exchange on FIAT currencies such as dollars and euros. As the country implements capital restrictions due to the low foreign reserves caused by the current cheap price of crude oil.
The poor availability of foreign currency in the retail market is also a driver of growth for cryptocurrencies. As businesses have a hard time getting the dollars they need to import materials, many turn towards BTC and other crypto coins as a form of payment. The shift has been difficult as very few companies accepted crypto as a form of payment in Africa. But the difficult situation when it comes to foreign reserves has pushed many to adopt blockchain technology.
Despite the overwhelming push for the adoption of cryptocurrencies, Nigerian regulation remains unclear. The country was initially hostile to the blockchain, in 2017 the Central Bank of Nigeria (CBN) issued a warning against crypto assets, and recommended financial institutions to stop encouraging trading in crypto in the country. Despite its popularity, Bitcoin and crypto remain in a legal grey zone in Nigeria.
In response, the CBN has begun developing a road map to develop crypto regulation. The plan is in the very early stages and no details of it have been revealed. The only concrete information is that it is being formulated, but there is not even a date for its presentation to the public.
Aside from the legal regulation needed to boost adoption, Nigeria remains behind in other aspects. Despite the growth of cell phone coverage, access remains poor outside major population centers and coastal areas. This severely limits adoption by those who would benefit the most by the technology.
Lastly, the financial system of the country remains adverse from adopting the technology in full. Most of the traditional banks remain in waiting for the CBN road map. This hasn't stopped Nigerians from opening local crypto exchanges, but these remain small in trading volume compared to other countries.
First, as mentioned before, Nigeria is at the forefront of p2p adoption. Most of the trading done in cryptocurrencies is through the p2p markets such as Remitano. This is a platform that operates in more than 50 countries and recently developed a new web wallet with integrated support for NGN.
Read how to buy bitcoin in Nigeria with the Nigerian Naira form more information.
Since p2p marketplaces don't require a central authority to allow for transactions they have become the default choice for those Nigerians trading cryptocurrencies. Another popular recent alternative has been Bitcoin Automated Teller Machines (ATM).
In April 2020 the first Crypto ATM was installed in Lagos by Blockstale BTM. The company has plans to install more of these machines in another 30 locations around the capital city. An important step, but a small one considering there are more than 8000 crypto ATMs right now in the different countries of the world.
Right now in Nigeria, the fee of crypto ATMs stands at 5% to buy and sell according to the site CoinAtmRadar. The single machine in the country supports transactions using naira and has a limit of 100 USD for those unverified, and 2000 USD for those who completed the ID verification. Sadly, the ATM only supports operations in BTC. This means it cannot be used to purchase other altcoins such as Ether or Litecoin.
Cryptocurrency adoption is heating up in Nigeria with Bitcoin at the head. As many more Nigerians enter the market, many alternatives to buy crypto have opened. On the one hand, Bitcoin ATMs are making their debut in the nations. On the other, p2p marketplaces are leading the charge as many more decide to trade as a way to generate side income.
Regardless of where in the adoption curve you are, it is impossible to deny that the trend won't reverse any time soon. The time is now to learn more about the crypto economy and ride the wave of adoption.
