If there’s a place where cryptocurrencies draw significantly more attention than anywhere else right now, it has to be Nigeria. Africa’s largest economy is driven by its oil exports, expanding manufacturing, financial services, communications and information technology sectors, but also by a tech-savvy generation that asks Google about Bitcoin more than its peers in other countries. Despite the progress, however, cash remains the only option for many Nigerians to buy cryptocurrency. New services are aiming to satisfy that demand.
Half of Nigeria’s Population Remains Financially Excluded
Nigeria accounts for close to a quarter of all internet users in Africa. Over 123 million Nigerians have access to the web according to Internet World Stats latest data, and one would think that using an online platform to acquire cryptocurrencies isn’t an issue for them. Indeed, opportunities to buy bitcoin on the internet have been increasing, and so have the people that take advantage of them. The Nigeria Bitcoin Community portal lists a number of broker and trading platforms available in the country such as Quidax, Luno, Blockvila, Alphabits, and peer-to-peer exchanges like Remitano, Localbitcoins, Paxful, Coindirect, Buy Coins, and Coincola. Bitcoin.com Local is also available to Nigerians. Other options include Cryset, Redimit, Instantgold.
Purchasing cryptocurrency online, however, often requires the buyer to pay electronically, using “traditional” methods such as a bank transfer or credit card and not all P2P platforms allow in-person cash trades. And here is the real issue — having access to the internet doesn’t mean you get to have a bank account too. Around half of Nigeria’s 200 million citizens remain unbanked, and together with the category of the underbanked they form a majority of almost two thirds. According to data released by the World Bank, only around 40% of Nigerian adults have an account with some financial institution or a mobile money provider.
At the same time, the 2018 Global Findex report showed that nearly one in 10 unbanked Nigerians get their wages in cash, including four million who have a mobile phone. Add to that 15 million unbanked Nigerian farmers that sell agricultural goods for cash, some 10 million of whom are mobile phone users, too. That’s a tremendous growth opportunity for cryptocurrencies that need a simple phone to “work,” and not even internet is absolutely necessary thanks to SMS wallets like Cointext, for example.
Millions of financially excluded Nigerians would potentially benefit from the financial freedom that comes with decentralized digital money, if they could only get crypto. Cash is ubiquitous in this part of the world and it is the universal payment method the poor and the underprivileged have access to. New opportunities to buy bitcoin with paper money have been emerging in Nigeria in response to interest and demand.
Buying Bitcoin With Vouchers Paid With Cash
Yellow Card is a platform that has the tech and internet savvy Nigerians covered, offering them purchase of cryptocurrencies online using a bank transfer or ATM card to load their accounts with naira and then pay for the digital coins they want. It currently supports bitcoin core and dash and will be adding bitcoin cash (BCH) and tether (USDT) in the near future, a company representative confirmed. However, people that have only cash in their pockets are also welcome to acquire crypto from a Yellow Card shop or any of the platform’s agents. To do that, they need to buy a Yellow Card voucher from a merchant which comes with a 16-digit code and redeem it in the mobile app.
Munachi Ogueke, CBO at Yellow Card Financial, told news.Bitcoin.com that although the major demand still comes from traders with bank accounts who generally move bigger volumes, the cash option is doing well too. Yellow Card is currently working with agents in and around Lagos, the country’s commercial and financial hub, and the federal capital Abuja, but it has some serious plans for expansion in the rest of the country aiming to add thousands of brick and mortar stores to its network. There are many different reasons for the increased demand for crypto in Nigeria, Ogueke commented, pointing to the country’s young population and high interest in technology among other factors. Noting that cryptocurrencies are also gradually becoming a popular remittance tool for Nigerians that live and work abroad, he stated:
We are seeing explosive growth.
Nigeria Gets a Bitcoin ATM and It Won’t Be the Last
Other cash for crypto options are gaining ground too. Nigeria now has at least one operational Bitcoin ATM. For various reasons, including security concerns, there’s only a couple of dozen teller devices supporting cryptocurrencies in the whole of Africa, the Coinatmradar map shows. According to local media reports, Nigeria got its first BATM only this year. The device was deployed in Dazey Lounge & Bar in Lagos in early January by a local company called Blockstale. The ATM has been manufactured in China but has an “Africa-focused design,” which takes into account the safety problem in the country, featuring an alarm system, a remote tracker and bio scanners to make it theft and vandal-proof, as the Weetracker news outlet reported.
Speaking to news.Bitcoin.com, Chief Executive Daniel Adekunle revealed that Blockstale is gearing up to install more cryptocurrency ATMs across Nigeria and in neighboring countries. The company has already delivered five more machines that will be deployed in Lagos by the end of the month and will then move on to Abuja towards the next quarter. These are two-way devices supporting both purchases and sales of BTC for the moment, but more currencies will be added later. Blockstale is also considering the introduction of a mobile top-up feature allowing users to reload their prepaid mobile phones using crypto. “Nigerians have trust issues, meaning we prefer to have direct interactions because we believe that this is safe, secure and best practice to avoid loss of funds,” Adekunle commented, adding:
We operate in a cash-based economy even though our banks want us to go cashless. These BATMs serve as an on-ramp for users looking into cashing out their digital assets or having quick access to purchase digital assets with cash securely.
Being able to buy cryptocurrency with cash directly is undoubtedly a convenience for many Nigerians. But as the option is not widely available yet, there is another interesting alternative to vouchers and teller machines — gift cards. Hong Kong-based digital asset trading platform Coincola offers an OTC marketplace for major cryptocurrencies including BTC and BCH. In 2019, the exchange launched an active campaign to enter the Nigerian market and has been accepted very well, according to Nigeria Bitcoin Community. Besides facilitating peer-to-peer crypto purchases and sales with the national fiat currency, the naira, the exchange maintains a gift card trade section where Nigerians can buy bitcoin with just about any gift card you can imagine.
Do you think these new cash-based services will bring more Nigerians into Bitcoin? Share your expectations in the comments section below.
Disclaimer: This article is for informational purposes only. It is not an offer or solicitation of an offer to buy or sell, or a recommendation, endorsement, or sponsorship of any products, services, or companies. Bitcoin.com does not provide investment, tax, legal, or accounting advice. Neither the company nor the author is responsible, directly or indirectly, for any damage or loss caused or alleged to be caused by or in connection with the use of or reliance on any content, goods or services mentioned in this article.
Images courtesy of Shutterstock, Yellow Card, Blockstale.
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