Nigeria is in ongoing discussions with Binance for a Digital Economic Zone powered by Blockchain Technology.
The Nigerian government would like to develop a Virtual Free Zone – and Binance might be their main crypto partner. The digital economic zone will be the first virtual free zone in West Africa once it is complete. The Nigerian government has initiated discussions with Binance through the Nigerian Export Processing Zones Authority (NEPZA) to discuss the formulation of these plans.
The conversation between the Nigerian authorities and cryptocurrencies platform Binance Holdings Ltd in establishing a digital economic zone will aid entrepreneurs in fast-tracking blockchain technology in the West African nation. The Nigeria Export Processing Zones Authority (NEPZA) recently declared a partnership with Binance. The Authority is responsible for aiding the government to regulate and operate free zones in the West African country. NEPZA stated that it intends to develop a hub of a digital economic zone similar to the Dubai Virtual Free Zone aided by the leading cryptocurrency exchange. The preliminary meeting is sure to yield significant benefits.
Binance initiative in boosting mainstream Blockchain Adoption
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Crypto Lists Ltd understands that this agreement with the West African nation is compared to previous engagements between Binance and Dubai. In December 2021, Binance accepted to facilitate Dubai’s establishment of an industry hub for global digital assets. It promoted long-term economic growth and development while encouraging crypto companies to pursue licensing in the United Arab Emirates (U.A.E).
Binance’s partnership with Nigeria is similar to its collaboration with the South Korean city of Busan. The crypto exchange company had a signed memorandum of understanding(MoU) with Busan authorities for technological and infrastructural support. This develops the blockchain ecosystem and promotes the city’s Digital Asset Exchange.
Furthermore, the Securities and Exchange Regulator of Cambodia(SERC) partnered with the exchange platform to develop the nation’s security sector. Cameroon has also partnered with Binance to boost crypto and blockchain adoption.
The Ever growing Crypto Adoption in Nigeria
The Managing Director of NEPZA, Adesoji Adesugba, disclosed that the primary objective of the authority is to give rise to a thriving virtual free zone and benefit from the near trillion dollar economy in blockchains and digital economy. The West African nation is the most populous in the continent. It aims to utilise digital technology in diversifying the economy from the crude oil industry. The country’s economy is dependent on oil and the virtual free zone would also effectively attract the ever-increasingly connected and youthful population. Interest in the digital space has seen the country promote the emergence of fintech startups such as Flutterwave Inc. and Interswitch Ltd with billion-dollar valuations.
The Nigerian government had earlier enacted regulations for trade in digital assets. Further, Nigeria Exchange Limited has plans to develop a blockchain-enabled platform this upcoming year to further trade at the bourse and increase investment in its regional economy. This was confirmed in June this year by the Chief Executive Officer of Nigeria Exchange Limited, Temi Popoola, as a way of reaching out to young investors and expanding its reach.
The country has one of the highest cryptocurrency adoptions globally, alongside Kenya, South Africa, and Tanzania, with an estimated 22 million crypto owners. Nigeria has made significant progress in the adoption of Bitcoin in particular. Its crypto market is among the fastest growing with its peer-to-peer Bitcoin trading volume exceeding $1 billion between January 2022 and June 2022. Crypto Lists confirms, as outlined by Paxful, a P2P crypto exchange platform the country is among the most significant markets globally. The P2P platform indicates that the country’s trading volume in the first half of this year was $400 million when added to that of 2021 of $760 million.
The recent initiative to partner with Binance is on the back of Nigeria’s Central Bank digital currency launch in October 2021. It became the second after the Bahamas Sand dollar. The eNaira is the digital currency and has amassed transactions worth 4 billion Naira($9.2 million).
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Crypto is still banned in Nigeria
Despite the country’s high crypto adoption, its government is still hostile to the industry and has banned crypto. The Central Bank of Nigeria ordered a halt by commercial banks to enable crypto transactions. Its Supreme Court cited the threat to the broader financial economy of the country. This did not stop the young population from using cryptocurrency. Nigeria’s Securities and Exchange Commission published regulations on digital assets in the country to protect investors and facilitate market transparency. It deduces that this indicates favour towards the technology.