33.4m Nigerians trade crypto as CBN’s eNaira suffers neglect

Nigerians have remained unflinching to explore blockchain technology and cryptocurrency that rides on it in search of financial succor despite the ban imposed on the digital assets by the Central Bank of Nigeria (CBN).

According to a new report by KuCoin, a world-leading cryptocurrency exchange, 33.4 million Nigerians, which accounts for 35 per cent of the population aged 18 to 60, currently own cryptocurrencies or have traded cryptocurrencies over the past six months.

The report titled: ‘Into The Cryptoverse’ revealed that Nigerians are embracing cryptocurrencies by virtue of having limited access to affordable financial services. It added that Cryptocurrencies are thus becoming an alternative solution for the storage and transfer of assets.

The report further revealed that 52 per cent of Nigerian crypto investors allocate over half of their assets to cryptocurrencies.

It further reads in part: “65% of Nigerian crypto investors make fiat deposits to cryptocurrencies via peer-to-peer trading. Another important finding is that 70% of Nigerian crypto investors intend to increase their cryptocurrency investments over the next 6 months, giving reasons to believe that digital asset adoption in the country is accelerating.

Factors fueling the aggressive crypto adoption by Nigerians include the free fall of the country’ local currency, Naira against the greenback. For instance, Naira has depreciated by over 209 per cent in the past six years.

To divert the growing appetite of Nigerian youths in crypto assets, the CBN in October 2021 launched eNaira, Africa’s first Central Bank Digital Currency (CBDC) which has however suffered neglect after the initial rush it enjoyed after the launch.

The Apex bank released two mobile applications for the eNaira, one for individual and the other one for merchants.

Checks by Business Metrics revealed that as at press time, revealed that the eNaira Speed Merchant Wallet (Business) has recorded just 50,000 downloads with an 2.7 out of 5 star rating coming from 457 reviews.

Similarly, eNaira Speed Wallet (Individual) has recorded more than 100,000 downloads  with an 3.6 star rating by more than 6,000 users who reviewed the functionality of the App.

Meanwhile, KuCoin survey further shows that 37 per cent of crypto investors in the country started trading cryptocurrencies more than three years ago, including 6 per cent started doing so more than six years ago.

With national inflation rates climbing to their highest point since 2008, the challenging economic climate in Nigeria was worsened by the COVID-19 pandemic, making cryptocurrencies an attractive alternative source of income, particularly in the bullish market in 2021.

Such reasons are backed by the findings in the report, which reveal that 26 per cent of surveyed crypto investors reportedly started trading cryptocurrencies over the past six months.

The high adoption rate of cryptocurrencies also surfaced gender parity in crypto investment, as the survey revealed that women account for 50 per cent of crypto investors, on par with men.

The breakdown of reasons for investment reveals that 53 per cent of investors consider cryptocurrencies a reliable value-storage and payment means, 50 per cent invest to gain higher returns in the long run, 40 per cent attempt to start their own businesses and improve living conditions, 36 per cent invest for an additional source of income to their salaries, 34 per cent strive to achieve financial independence, and 26 per cent hope to rely on cryptocurrencies as their main source of income without having to work additionally.

The survey also suggests that Nigerian crypto investors allocate an average of 60 per cent of their portfolios to cryptocurrencies, followed by cash/bank deposits (20 per cent) and foreign currencies (7 per cent), and other instruments.

Also, 52 per cent of Nigerian crypto investors allocate over half of their investments to cryptocurrencies, while so-called “super crypto investors”which account for 22 per cent of total crypto investors in the country, allocate over 90 per cent of their investment portfolios to cryptocurrencies.

According to KuCoin, cryptocurrency adoption rate increases in Nigeria are also evident from the previous report, according to KuCoin data, which identified that the average number of monthly transactions across African countries has shown a 1,386.7 per cent increase from January 2021 to January 2022, with the number of users also showing a 2,467.2 per cent spike over the same period.

The KuCoin Into The Cryptoverse report on Nigeria showcases that cryptocurrencies are becoming an important financial instrument in the African country in times of economic hardship as a means of payment and value storage. Click here to get the full report.