With its newest nationwide blockchain coverage, Nigeria appears to be going huge on blockchain know-how. However the West African nation doesn’t appear to be welcoming crypto anytime quickly—blockchain coverage or not.
On Could third, the Federal Ministry of Communications and Digital Economic system (FMCDE) announced the approval of a nationwide blockchain coverage. Basically, because of this the federal government is throwing its weight behind an rising know-how which it hopes can “facilitate the event of the Nigerian digital economic system and allow residents to have extra confidence in digital platforms.”
The transfer was lauded as game-changing and reflective of the federal government’s pro-technology place. Nonetheless, a number of business watchers are elevating questions regarding implementation and asking a important query: why is crypto nonetheless banned by a pro-blockchain authorities?
Blockchain is a complicated know-how that makes use of database mechanisms to document transactions in a decentralised public ledger. Advocates of blockchain describe it as a next-generation know-how that may be utilized to optimise each aspect of human life, starting from monetary companies and healthcare to produce chain and identification administration. Based on analysis agency Gartner, the enterprise worth added by blockchain will enhance to over $3 trillion by 2030—a pie the Nigerian authorities is now hoping to plug the economic system into.
Crypto continues to be not welcome
For the Nigerian authorities, approving a nationwide blockchain coverage doesn’t quantity to accepting cryptocurrency (which stays probably the most outstanding use case of the blockchain). In July 2021, the CBN banned banks from facilitating crypto transactions and requested that banks “shut accounts of individuals or entities concerned in cryptocurrency transactions.” The financial institution cited terrorism financing and cash laundering as its key causes for the motion, sustaining that it was defending Nigerians from the dangers of crypto adoption.
In the meantime, the nationwide blockchain coverage draft reveals that the Nigerian authorities continues to be crypto-averse because it seeks to develop a regulatory framework for different use circumstances of the blockchain. “Blockchain know-how undoubtedly holds nice potential for the event of Nigeria’s digital economic system. Numerous the main focus has been on cryptocurrencies, particularly bitcoin. Nonetheless there’s much more that blockchain can do for the economic system and this technique doc goals to redirect the main focus to different areas,” the draft reads partly.
Christian Duffus, founder and CEO of blockchain startup Fonbnk, defined to TechCabal that the blockchain coverage could also be a reactionary measure by the federal government to ship out a transparent sign that it isn’t broadly towards blockchain applied sciences, particularly after the publicity of its ban on crypto. “The blockchain coverage is a crucial transfer by the federal government to accommodate blockchain innovation within the nation. After the ban on crypto, they will’t afford to be seen as a authorities that associates illegality with blockchain operators. Apparently, this coverage additionally gives a framework for eNaira, the blockchain-powered digital forex launched by the CBN,” he stated.
Oluwatobiloba Ajayi, blockchain knowledgeable and founding father of B2B crypto startup Ivory Pay, stays unruffled by the exclusion of crypto from the nationwide blockchain coverage. “Crypto considerably takes management and oversight of funds off the federal government’s watch. And so they don’t need that, so I’m undecided this coverage will assist crypto,” he stated on a name with TechCabal.
How does the blockchain coverage assist?
Based on the FMCDE, the overarching objective of the coverage is to create a blockchain-powered economic system that helps safe transactions, information sharing, and worth change between individuals, companies, and authorities. The coverage virtually serves as a government-led strategy to the adoption of blockchain know-how in Nigeria. Whereas the subsequent steps within the implementation course of stay unclear, the actual fact stays that by this coverage, the Nigerian authorities is asserting itself as a collaborator for blockchain-related innovation within the nation.
Nnamdi Uba, the CEO of HouseAfrica, a startup that leverages blockchain to resolve land title possession in Africa, spoke to TechCabal effusively in regards to the nationwide blockchain coverage. “I’m one of many individuals which have been engaged on that coverage mission for the previous three years,” he revealed. “We wish to unlock the facility of blockchain in our nationwide economic system by a government-led strategy. The objective is to entrench the usage of blockchain in authorities processes, then roll it out to the plenty.”
“Nonetheless, we should realise that blockchain doesn’t begin and finish with crypto. My actual property firm, for instance, is blockchain-powered, but we don’t use crypto. Blockchain may help in some ways, together with the tokenisation of properties, provide chain monitoring, and authentication of paperwork. We may also see extra fascinating use circumstances come up sooner or later. As you realize, the incoming administration has additionally promised to deal with blockchain know-how,” he shared.
Some initiatives outlined within the coverage’s technique framework embody the promotion of blockchain enterprise incentives programmes and the institution of a nationwide blockchain sandbox for proof of ideas and pilot implementation. These ambitions by the federal government convey a pleasant regulatory framework for blockchain startups within the nation.
“Traditionally, we’ve got seen authorities insurance policies work towards tech startups—because the case was in Lagos’ ban on ride-hailing. That is one time we’re seeing the federal government roll out a coverage that incentivises builders and traders on this area of interest, It’s a giant deal, however for it to work, the federal government should be on the forefront. They need to drive its implementation and combine the know-how into their very own techniques,” Ajayi stated.