The Nigerian government has assured crypto firms of their unwavering support, despite their protracted issues with Binance and its executive Tigran Gambaryan in the past. The country presently has an ongoing $80 billion lawsuit against Binance that it filed last month.
In a statement by the Information and National Orientation Minister Mohammed Idris, and reported by leading local news outlet Leadership, the minister affirmed that the country is still open to working with other crypto firms. In the statement, the minister mentioned that the country is prepared to take the regulatory approach rather than suppression.
The Nigerian government announced a lawsuit against Binance in February alleging economic losses and tax evasion. The lawsuit came months after the country detained and released the senior Binance executive. According to local reports, the lawsuit has sparked concerns over the business climate in the country, with crypto, blockchain and other related firms skeptical about the country’s approach to regulation.
Nigeria wants to support crypto firms
Nigeria has now assured the local and international crypto community that things are set to change despite the country’s behavior towards Binance. In the interview, Minister Mohammed Idris noted that Nigeria has never been hostile to any crypto firm operating in the country, provided they are doing it within the confines of the law.
Idris, in his discussion about Binance, mentioned that other crypto firms are still carrying out their operations in the country. “There are other companies operating in the crypto sector in Nigeria, you don’t see them facing charges,” he said. He also added that the crackdown is also related to the country’s efforts to cut illicit activities like money laundering, illicit financial flows, and terrorism financing.
He also added that the country is presently trying to make the crypto landscape friendly for investors, noting that a review of most of the rules is currently ongoing. “The government is working to remove bottlenecks for investors by rolling out measures to improve the ease of doing business including a review of visa rules, tax laws, and expatriate worker quotas,” he added.
Idris also denied that the country held Binance responsible for the devaluation of the naira, noting that it was driven by several factors which included the decision of the government to float the currency in 2023. He added that although Binance contributed to the devaluation of the naira, the charges that the country leveled against the crypto exchange was tax evasion and money laundering.
Crypto adoption and the future outlook
Nigeria has been one of the heavyweights in the global crypto industry, with the youth population of the country dabbling into several assets and sectors of the industry. According to data by on-chain analysis platform Chainalysis, Nigeria currently ranks as the second in global crypto adoption, only second to India. The metric weighs population and purchase power according to countries.
In its report, Chainalysis mentioned that Nigeria was responsible for transacting $59 billion between July 2023 and June 2024. Aside from digital assets being held by some percentage of the population due to the effects of inflation, others use it for international trade or remittances.
In sub-saharan Africa, Nigeria accounts for the inflows of about 40% of stablecoin inflows. Stablecoins are digital assets pegged to a particular currency, with most of the digital assets in this case pegged to the United States dollar. However, these activities have been dampened by the lack of regulatory clarity from the government, discouraging foreign direct investments.
For instance, Nigeria has seen its foreign direct investment inflows drop drastically, with World Bank data noting a drop from $8.1 billion in 2009 to $1.6 billion in 2023. While the country has promised to make the sector attractive to both local and international traders and firms, it remains to be seen what will happen. While most crypto transactions still follow the peer-to-peer (P2P) route, investors will be hoping to have other flexible methods of trading assets.
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