Emomotimi Agama, the Director General of Nigeria’s Securities and Exchange Commission (SEC), recently underscored the significant benefits cryptocurrency could offer to the country’s unbanked population. At the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria, Agama predicted that Nigeria’s cryptocurrency market could reach $52.5 million by 2028.
Current Market and Adoption Rates
Nigeria’s cryptocurrency market is currently valued at over $400 million, with around 33.4% of Nigerians actively engaged in crypto trading and transactions. This high adoption rate presents a unique opportunity to extend financial services to the 38 million unbanked adults in the country.
Agama highlighted the accessibility of cryptocurrencies, noting that many Nigerians without traditional bank accounts have crypto wallets. This offers a practical solution for financial inclusion, providing a means for those without bank accounts to access financial services.
Reducing Remittance Costs
Agama also emphasized that cryptocurrencies like Bitcoin could significantly reduce remittance costs. This is particularly beneficial for Nigerians in the diaspora, as Nigeria is one of Africa’s largest recipients of remittances. Lower transaction costs would make it easier and cheaper for Nigerians abroad to send money home.
Call for Clear Regulatory Framework
Despite the advantages, Agama acknowledged several challenges associated with cryptocurrency use, including regulatory uncertainty, security concerns, and financial literacy issues. He stressed the importance of a balanced regulatory approach to harness the benefits of crypto assets while mitigating risks.
Agama advocated for the establishment of a clear regulatory framework, enhanced cybersecurity measures, and improved financial education to protect investors and promote a healthy digital asset market.
Regulatory Developments
In April, Nigerian President Bola Ahmed Tinubu appointed Agama as the head of the SEC. Shortly after his appointment, the SEC introduced an amendment to the initial Rules on Digital Assets Issuance, Offering Platforms, Exchange, and Custody. This program aims to help virtual assets service providers comply with the new regulatory requirements.
Agama’s comments reflect a growing recognition of the potential of cryptocurrencies to drive financial inclusion and economic growth in Nigeria, provided that robust regulatory measures are in place.
