President Tinubu’s administration in Nigeria has been cracking down on peer-to-peer cryptocurrency trading, causing outrage among young Nigerians. However, their enthusiasm for Bitcoin remains strong. According to Google Trends, Nigeria is currently the country with the highest interest in Bitcoin, followed closely by El Salvador. Delta state leads the pack in Bitcoin interest, followed by states like Anambra, Ekiti, Enugu, Ondo, Ebonyi, Bayelsa, Osun, Edo, and Imo. Surprisingly, Lagos, Nigeria’s commercial hub, ranks outside the top 15 cities in terms of Google search interest for Bitcoin.
The data suggests that areas with insecurity, low bank penetration, and a high number of millennials are more likely to adopt Bitcoin as a trusted store of value and a means of facilitating payments. Nigerians have turned to stablecoins, particularly those tied to the U.S. dollar, as a hedge against inflation and currency fluctuations. Tether (USDT) is the dominant stablecoin in the market and is increasingly being used by local businesses and the diaspora for transactions.
Nigeria is currently one of the youngest countries in the world and one of the fastest-growing in Africa, according to a United Nations study. The under-15 age group makes up 43% of the population.
In an attempt to address economic challenges and prevent a currency collapse, the Nigerian government has taken questionable actions. In May 2024, they began preparing regulations to ban P2P cryptocurrency exchanges using the national currency, the Nigerian naira. The Securities Exchange Commission (SEC) has accused the Binance crypto exchange of currency manipulation and speculation, leading to the devaluation of the naira and requiring government intervention. The SEC has shown its firm stance by imposing a ban on Binance’s operations in Nigeria and arresting and detaining its top executives. While one executive managed to escape custody, the other is now facing trial on charges of money laundering and tax evasion.
In January 2024, the Central Bank of Nigeria released initial guidelines for banks opening cryptocurrency accounts, although banks are still not allowed to trade or hold virtual assets in their portfolios.
The question arises of how much enforcement is too much when it comes to regulating the crypto industry.