The Nigerian government and Binance are in early talks about a proposed partnership that will birth a crypto-friendly digital city.
First Crypto-friendly Virtual Free zone in West Africa
The Nigeria Export Processing Zones Authority (NEPZA), Binance, and the technology infrastructure firm, Talent City, met in Dubai on Friday, September 2nd, 2022. At the meeting were Prof. Adesoji Adesugba, the managing director and CEO of NEPZA; Nadeem Ladki, the executive director of Binance on regional strategic partnerships; Luqman Edu, the CEO of Talent City; Sameera Kimatrai, Binance Senior Legal Counsel; and Sikiru Lawal, NEPZA director.
NEPZA announced this move in a Twitter thread.
With plans to build the first virtual free trade zone in West Africa, this meeting supports the vision of NEPZA. Part of the authority’s vision is to expand the frontiers of innovation in the operations and management of free zones in the country and the Continent.
The digital city is to be built similar to the virtual free zone in Dubai.
Established in 2017, Binance is the largest exchange in the world in terms of the daily trading volume of cryptocurrencies. Talent City is an innovative city that provides amazing digital experiences and is built for a connected tomorrow. NEPZA ‘s partnership with these firms has different potential, but we will look at the possible outcome of cryptocurrency adoption.
Is Nigeria One Step Closer to Cryptocurrency Adoption?
In 2018, Paul Triolo, the Head of geotechnology at Eurasia Group, said, “There have been two reactions from central governments. One is to try to figure out how to regulate the darn things. The other is, how do we figure out how to make our own?” These reactions have remained the same over the years, and governments have chosen one or the other.
The Nigerian government and Binance meeting raises a few eyebrows as it gives the impression that we are a step closer to adopting cryptocurrencies as a country.
Though the Nigerian government is yet to lift the ban on trading cryptocurrencies, its CBDC, the eNaira, is not doing as well as hoped. So, the threats around the creation and movement of money remain. The emergence of cryptocurrency technology means that almost anyone can make money or some form of money. This is bound to make the government wonder about their future in the nation’s economy and the safety of the citizens’ finances.
Undoubtedly, CBDCs can promote a secure and more affordable & easy way to make purchases. This is good for customers and businesses as the need for middlemen and banks and the transaction fees are reduced. However, Nigerians are yet to see what eNaira can do for them as a CBDC. Instead, thanks to trust issues, they only see the privacy concerns and the unnecessity of the coin. While we can’t be yet sure of the full impact of the meeting, Nigerians should get ready.
How Nigerians Can Get Ready for a Possible Crypto Adoption in The Country
In the press release, Prof. Adesugba shared “We seek to break new grounds to widen economic opportunities for our citizens in line with the mandate of the Authority, the directive of the Honourable Minister and the economic development agenda of President Muhammadu Buhari. Our goal is to engender a flourishing virtual free zone to take advantage of a near trillion dollar virtual economy in blockchains and digital economy.”
Despite the crypto trading ban, Nigeria has one of the highest cryptocurrency adoption rates. According to Triple A, the number of crypto owners in Nigeria is 22,332,791. That is about 10.34% of the population. If the government finds a way to regulate this sector, it might serve as an incentive to lift the ban.
Speaking on the partnership, Binance’s spokesperson shares the aim of the establishment as “generating long-term economic growth through digital innovation.” Adesugba also expressed that the zone would “widen employment opportunities” for Nigerians.
The question is “how?”
Nigerians might be considered the most crypto-obsessed nation, but most of its citizens know little about cryptocurrencies. Many know nothing more than buying and holding and maybe trading. To position yourself for the possible adoption of cryptocurrency in Nigeria, learn all you can about the use cases of cryptocurrencies. From payment solutions and crypto writing to Decentralized Autonomous Organizations (DAOs) there is more to cryptocurrency than trading and ‘hodling’.
Nigerians should increase their knowledge in preparedness for when the government moves out of the way of innovation. Learning ways to use blockchain technology and, maybe, tokenization, to create solutions for existing challenges in the country should be the goal.
As outcomes unfold following the meeting between the Nigerian government and Binance, the Nigerian citizens should be prepared.