March 31, 2021

CRYPTOCURRENCY: Nigeria may revisit ban as new investors, use cases rise

FTX Africa takes cryptocurrency campaign to Enugu

By Prince Osuagwu

Nigeria’s present disposition on cryptocurrency may not stand for too long. This is as almost all world economies are adjusting their trade activities to accommodate crypto transactions. The means of payment is also attracting new investors and appreciable use cases. Cryptocurrency, sometimes, simply called crypto, is a digital currency that can be used to buy goods and services.

It uses online ledger with strong cryptography to secure online transactions. However, much of the interest in these unregulated currencies is to trade for profit, with speculators at times driving prices skyward. The Nigerian government recently placed a ban on transactions on crypto through local banks, warning users of the uncertainty and heavy risks involved that can cripple an economy.

Meanwhile, world’s largest payment company, PayPal recently announced that it has agreed to acquire Curv, an Israelbased crypto-security firm as it expands its portfolio in crypto currencies and digital assets. It is a deal that could potentially open up new use cases for the crypto market. PayPal had recently created a new business unit focused on blockchain, crypto and digital currencies.

Curv will be joining the newly formed group. Founded in 2018, Curv provides companies with digital asset security technology that is delivered as a cloud service. The acquisition by PayPal presents Curv with an opportunity to expand into a global market while providing the service to over 325 million PayPal users around the world. PayPal is not the only investor deepening the use case for the crypto market.

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Just last week, Tesla announced that it has started accepting Bitcoin as a payment method for vehicles. Chief Executive Officer of Tesla Inc., Elon Musk said that a Tesla vehicle can now be bought using bitcoin and the option will be available outside the United States later this year. The automaker last month revealed that it had bought $1.5 billion worth of bitcoin.

Also, in February, global music icon and rapper, Jay Z and Twitter CEO, Jack Dorsey announced they were putting together 500 bitcoin, which is currently worth $27.2 million in an endowment called BTrust. According to Dorsey, the fund will be set up as a blind irrevocable trust used to fund development in Africa and India.

Dorsey also donated $1 million to cryptocurrency policy think-tank Coin Center, according to an announcement tweeted by the organisation’s director, Jerry Brito. Also, financial services backbone provider, Visa has announced support for cryptocurrencies on its payment network. It will be partnering with but would add other exchanges to the project with time. The involvement of these three industry giants, PayPal, Mastercard and Tesla in embracing digital currencies for transactions speaks volumes to what is going to happen in economies they operate.

PayPal started supporting crypto in October 2020, Mastercard came on board in February 2021 while Tesla followed suit in March. Founder of Moon Rock Capital, a blockchain investment advisory firm, Jonathan Habicht, described the new development as “Great steps and these certainly make me bullish on payment use cases in general.” In Nigeria, 7.9 million out of the 41.89 million people who have active ATM cards are using Visa.

This indicates a relatively widespread use of Visa in the country and an indication that many people are likely to use the crypto visa card for online transactions involving digital currencies. But with the restrictions on crypto transactions via traditional banks, it is either the country realises the need to relax the ban or Visa, which is still a major partner of several Nigerian banks, will have issues driving the use of its new crypto card initiative into Nigeria.

Vanguard News Nigeria