Nigeria’s tech sector buzzes with anticipation, drawn to the transformative potential of blockchain technology. Amidst this enthusiasm, however, careful consideration is necessary. In 2024, fostering a thriving blockchain ecosystem should be at the forefront of Nigeria’s agenda. Today, we highlight two critical areas where government intervention is vital for unlocking the full potential of blockchain technology and its benefits for Nigeria’s economy.
We must adopt a balanced approach, emphasizing responsible regulation, collaborative efforts, and optimism.
Regulatory Dysfunction
While blockchain remains largely unregulated in Nigeria, existing frameworks struggle to address its unique features. This ambiguity creates uncertainty for investors, businesses, and consumers, hindering wider adoption.
Until December 2023, based on CBN guidelines, banks and other financial institutions remained prohibited from holding, trading, or transacting in cryptocurrencies on their account. Prior to this, all accounts linked to cryptocurrency trading were treated as fraudulent and banned.
The finance bill of 2023 is presently seeking to tax crypto-assets and transactions. However Nigerian Blockchain tech and allied businesses are still recovering from the financially damaging impact of the fraudulent aura deemed on it by previous CBN regulations.
Towards Effective Regulations
Serious consideration should be referenced from international models like Estonia’s “Blockchain Center of Excellence” and Singapore’s “Financial Technology Innovation Lab”. Closer to home, Dubai’s Virtual Asset Regulatory Authority demonstrates how regulation can foster innovation while mitigating risks.
All these are government-delegated bodies tasked with the proactive responsibility of creating a conducive playing field through regulations, policies and laws for Blockchain technology growth in their various countries. The creation of these specialized niche authorities allowed industry experts to be at the forefront of the decision-making process.
In 2024, the Nigerian government should embark on building trust and attracting responsible investment through a specialised Blockchain technology body. This in turn protects consumers and businesses from exploitation while creating fertile ground for responsible innovation. A dedicated regulatory body, equipped with deep blockchain expertise, will craft legal frameworks, facilitate collaboration, and partner with pioneers.
This is what is needed to lay the right foundation for blockchain technology-based businesses to thrive in Nigeria.
Promoting Profitable Partnership
On the foundation of suitable regulations are public and private partnerships. Government cooperation with blockchain players is crucial. Previous challenges, like the Binance ban, highlight the need for open communication and understanding. Acknowledging the existing ecosystem and partnering with key players would boost investor confidence and signal Nigeria’s commitment to responsible blockchain development.
Collaborative pilot projects offer a promising path forward. By bringing together industry expertise and regulatory insight in real-world scenarios, such projects can generate practical solutions, inform policy refinement, and accelerate implementation. This win-win approach benefits all: the industry gains faster validation, the government acquires valuable data, and consumers experience improved digital infrastructure and cross-border transactions.
Examples like South Africa’s central bank partnering with companies for faster cross-border payments and Kenya’s blockchain-powered land titling projects showcase the potential of collaboration. These initiatives demonstrate that responsible blockchain adoption can benefit diverse sectors and communities.
The way forward
The year 2024 will see an increase in fintech-based investments. The global market is optimistic about the potential of African markets. Previous barriers to entry like education poor telecommunications infrastructure, and so on. are becoming a thing of the past.
Numerous Fintech startups based in Africa have been attracting international attention and investment, resources that many governments have failed to secure. For Nigeria, it is important to establish a clear strategy to navigate these lucrative waters for the benefit of the nation.
