The Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, has announced that Nigeria’s cryptocurrency market is now valued at over $400 million, reflecting the country’s significant engagement in cryptocurrency trading and transactions. Dr. Agama made this revelation during the 2024 Annual Conference of the Association of Capital Market Academics of Nigeria (ACMAN) in Abuja, under the theme ‘Crypto Assets and the Nigerian Economy: Implications for Financial Markets Regulation’.
Surge in Cryptocurrency Adoption
Dr. Agama highlighted Nigeria’s impressive growth in crypto adoption despite economic challenges. He noted, “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.”
Future Projections and Financial Inclusion
The SEC Director General projected that the volume of Nigeria’s cryptocurrency market would hit $52.5 million by 2028, indicating a 12.66% increase from 2024. He emphasized the potential of cryptocurrencies to enhance financial inclusion, stating, “Approximately 33.4% of Nigerians own or use cryptocurrencies. The country can leverage this large number to provide financial services for the over 38 million unbanked adults. Some people don’t have bank accounts but they have wallets.”
Benefits for Remittances
Dr. Agama also pointed out the advantages of cryptocurrencies in reducing remittance costs. “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,” he said.
Challenges and Regulatory Needs
Despite the numerous benefits, Dr. Agama acknowledged the challenges facing the crypto industry, including concerns over illicit activities. The Economic and Financial Crimes Commission (EFCC) has reported cases of crypto-related scams. “Regulatory uncertainty, security concerns, and financial literacy pose serious threats 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.
Call for Balanced Regulation
Dr. Agama emphasized the need for a balanced regulatory approach to harness the benefits of cryptocurrencies while mitigating risks. “Crypto assets present significant opportunities and challenges for Nigeria’s economy. 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.
Remarks from SEC Chairman
Chairman of the SEC, Mr. Mairiga Katuka, echoed Dr. Agama’s sentiments, highlighting the potential advantages of cryptocurrencies for the market. He urged stakeholders to work together to advance Nigeria’s financial markets. “The introduction of crypto presents an advantage for the markets. Together, we can drive the development of a vibrant, resilient capital market in line with President Bola Tinubu’s vision of making Nigeria a prime investor destination. Let us work together to build a capital market that not only addresses the needs of today but also anticipates the problems of tomorrow with a view to finding solutions before issues arise,” Mr. Katuka added.
Conclusion
The SEC’s announcement underscores Nigeria’s burgeoning role in the global cryptocurrency landscape. With a substantial portion of the population actively engaging in crypto transactions, the country stands poised to benefit from increased financial inclusion and more efficient remittance systems. However, the path forward requires careful regulation and collaboration to address security concerns and ensure the market’s sustainable growth.
