Binance and Others Are Rushing to Provide Stablecoins to Nigerian Crypto Users

The Nigerian cryptocurrency demand may be on the verge of a local bull run, thanks to newly popularized avenues to the global market. 

Emmanuel Babalola, Binance’s affair manager in Nigeria, said he’s seen a 50 percent increase in signups so far in 2020, leading to “thousands” of new Binance consumers in Nigeria. Roughly 300 people signed up for a corresponding “masterclass” in Benin in January, teaching users how to set up their own intimate wallets and experiment with margin-trading strategies. There was so much demand for the six-hour class that Babalola choose run three more classes over the next four weeks and offer two a month going forward.

If various big-name crypto reckons vying to serve the developing world are looking for inspiration, look no further than this West African domain of 190 million. There’s rampant demand in Nigeria, where the World Bank estimates 35 million unbanked adults have planned a mobile phone. The vast majority of these unbanked users are women.

“The majority of users in Nigeria use Binance alert on their phones,” he said, adding there are roughly 4,000 traders in Binance’s Nigerian Telegram group. “By the end of this month, we’ll would rather a fiat on-ramp on the mobile app as well.”

Although Binance was one of the first global exchanges to launch a fiat-on-ramp in Nigeria, a trade in largely dominated by peer-to-peer exchanges like LocalBitcoins and Paxful, Binance isn’t the only game in town. The local trade BuyCoins, launched in the aftermath of 2017’s bull run also has a comparable fiat-on-ramp. On BuyCoins, Nigerians can buy cryprocurrency using their Naira-denominated debit membership cards or bank transfers. Lasebikan’s team created $50,000 worth of the ethereum-based stablecoin Naira, backed one-to-one in the bank, and mete out it through the local over-the-counter (OTC) traders’ association, Alpha Training Lab.

“In our country, there’s a lot of bitcoin trading that develops offline,” said BuyCoins co-founder Tomiwa Lasebikan. “People who trade a lot on WhatsApp groups. … No one in the country can accurately point of view how much [trading] activity there is.”

Lasebikan said the exchange now handles roughly $5 million in monthly quantity, predominantly in bitcoin trading. The modest infusion of stablecoins into the market served as an indirect on-ramp to the platform. 

The limited Naira effort garnered such clear results that now DeFi leader MakerDAO is trying a similar course to encourage local adoption. 

The ethereum-centric stablecoin project gave a $15,000 grant to the internet service provider Althea to propose connectivity in exchange for DAI stablecoins in Abuja, Nigeria’s capital city. So far there are 16 households participating and operating nodes, according to Althea co-founder Deborah Simpier, profit the startup around $15 worth of crypto a month for WiFi. She said they’ll be expanding to Lagos, Nigeria’s chunkiest city, next month and encouraging initial node operators to provide WiFi to local mobile subscribers, generating their own crypto takings. 

Binance’s Babalola said he’s heard of, and is optimistic about, such stablecoins, although his own team is focused on the exchange’s inborn stablecoin, BUSD. Stablecoins can be particularly attractive for traders who want to transact, for example, with undocumented youth who can’t get a formal reciprocation account. 

“Less than half of Nigerians have government-issued ID cards,” Babalola said. “Most crypto purchasers in Nigeria are young people in schools.”

All things considered, 2020 will see a wider variety of onboarding options than till doomsday before. In addition to a few incumbent African exchanges from pre-2017, like Luno, there are now several dealings focused on connecting Nigerians to the global cryptocurrency market. 

“We have agents on the ground going door to door, talking thither crypto and the potential it holds,” Babalola said.

Correction (Feb. 21, 19:30 UTC): This article has been updated to clarify that BuyCoins doesn’t right away distribute cryptocurrency to unbanked users and most customers with exchange accounts use banks.