Lagos: The Hotbed of Crypto in Africa’s Largest Economy
Feb 05, 2024
Key Insights
- Lagos is becoming a prominent crypto hub due to positive regulatory changes, including the Central Bank of Nigeria lifting banking restrictions on cryptocurrency exchanges and the SEC providing clear guidelines for digital asset operations.
- Lagos has a vibrant crypto community, driven by a desire to hedge against the devaluation of the Naira and economic instability.
- Lagos offers a high quality of life for digital nomads and crypto workers, with amenities like Bitcoin-accepting luxury hotels and widespread Airbnb options. The city hosts significant crypto events, supports connectivity even in remote areas through projects like Althea, and provides a scenic and enjoyable environment along the coast.
Primer
This African city has what it takes to be the continent’s No.1 crypto hub.
The heartbeat of crypto in West Africa, Nigeria ranks second overall on the Chainalysis Global Crypto Adoption Index and leads the region in raw transaction volume. Lagos is Africa’s top economy, boasting over 15.4 million people. The World Economic Forum (WEF) predicts it to be the most populous city in Africa by 2050.
In 2023, Lagos emerged as no. 16 in the top 50 crypto hubs, according to Recap.
Google Trends data also reveals that Lagos, Nigeria, has the most Bitcoin search volumes – indicating increasing interest. Now, it is dubbed the “headquarters of bitcoin” since everyone there knows about crypto.
The city is the home of the continent’s largest exchanges, including YellowCards, BuyCoins, Patricia, Binance, Luno and Quidax.
Now let’s look at the drivers – crypto regulation and adoption, enablers – quality of life, digital evolution, ease of doing business, and opportunities – crypto firms and events driving crypto growth in Lagos.
From Bans to Positive Regulation
From a positive regulatory standpoint, the Central Bank of Nigeria(CBN) lifted the 2021 banking restrictions on cryptocurrency exchanges and VASPs. They can obtain licenses from the Securities and Exchange Commission (SEC) and start operating so long they achieve documentation and customer requirements. As a result, pan-African exchange companies like Yellow Card are seeking licenses under the new licensing frameworks.
Besides, the SEC has also offered new rules on the Issuance of Digital Assets, registration requirements for Digital Assets Offering Platforms (DAOPs), Digital Asset Custodians (DACs), Virtual Assets Service Providers (VASPs) and Digital Assets Exchange (DAX). This clarity creates a premise for investment decision-making.
Crypto is Not Just a Buzzword in Lagos
Nigerians are crazy about crypto amidst the crumbling traditional financial system.
Moyo Sodipo, Co-Founder and CPO of Busha crypto exchange, stated, “When Busha gained popularity around 2019 and 2020, there was a big frenzy for Bitcoin. A lot of people were not initially keen on stablecoins. Now that Bitcoin has lost a lot of its value, there is a desire for diversification between Bitcoin and stablecoins. However, market shifts aren’t dampening activity. People are constantly looking for opportunities to hedge against the devaluation of the Naira and the persistent economic decline since COVID.”
Besides, the Nigerian government has a national blockchain policy to facilitate adoption by balancing regulation and innovation.
Binance Labs also operates an Incubation Program in Lagos to empower early-stage Web3 projects.
If that weren’t sufficient, blockchain has extended to the public transport system. For example, the passenger manifest system (PAM’s) blockchain-based system records the information of passengers traveling by road alongside offering quick care services to accident victims.
Another significant cryptocurrency link is Lagos’ new Bitcoin Lightning Network (LN) node, further connecting the continent to Bitcoin’s layer-2 payments network.
It is also the only city where protests are crowdfunded using crypto wallets to retaliate against police corruption.
Isn’t that just pretty amazing?
A Delightful Hub for Crypto Nomads and Workers
According to Numbeo, Lagos ranks sixth, just behind Nairobi, regarding quality of life.
While staying in Lagos, you need not worry, as George Residence (a luxury hotel) in the city accepts BTC payments. Aside from that, Lagos is among Airbnb’s fastest-growing global markets to host crypto enthusiasts and digital nomads.
If you thought that Lagos is all about a dense super-metropolitan environment, the city is physically beautiful. Being along the coast, you’ll enjoy boat rides, sea cave tours, sealife safari, dolphin watching, and sailing escapades while on work breaks or vacations.
Even with areas without internet connection, Althea, backed by MarkerDAO, offers connectivity through households participating and operating nodes paid in DAI. So, you can make cross-border payments regardless of your remote location.
The events to be excited about while in this epicenter of modernity include the NITDA CO-CREATE Africa Tech Exhibition 2024, which supports and awards companies driving growth locally. Others include 3.0 Verse Summit 2024 – Africa Edition, Lagos Blockchain Week Hackathon: Blockchain Interoperability, and Tech Unite Africa 3.0.
Despite the promises of Nigeria’s e-naira, crypto penetration remains positive and steady.
So, if you’re looking for a fast-and-furious crypto hub in Africa with a frontier spirit to start a crypto revolution, Lagos should be your no.1 destination.
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