Binance in talks with Nigeria looks to establish a crypto-friendly zone
Authorities in Nigeria and cryptocurrency exchange Binance Holdings Ltd. is in talks to create a digital economic zone that will support blockchain technology adoption by businesses in the West African country.
Binance in talks with Nigeria
According to a press release, Nigeria intends to use the Nigeria Export Processing Zones Authority (NEPZA) to establish the first economic free zone for bitcoin and other cryptocurrencies in West Africa.
NEPZA is in talks with Talent City, a company that specializes in creating special economic zones, as well as Binance, one of the top cryptocurrency exchanges.
Professor Adesoji Adesugba (NEPZA MD/CEO), Sameera Kimatrai (Binance Senior Legal Counsel), Luqman Edu (CEO Talent City), Sikiru Lawal (NEPZA Director). pic.twitter.com/73schHU4hYE
— NEPZA (@officialNEPZA) 2 September 2022
The proposed zone, according to NEPZA CEO Adesoji Adesugba, will be the first in West Africa and will function similarly to Dubai’s virtual zones, which are meant to offer crypto firms laws, regulations and tax incentives beneficial to the industry.
Adesoji Adesugba, NEPZA Executive Director said:
“Our goal is to create a thriving virtual free zone to take advantage of a nearly trillion dollar virtual economy in the blockchain and digital economy,”
According to the NEPZA statement, the partnership aims to create a digital hub “similar to Dubai’s virtual free zone.”
Nigeria, the most populous country in Africa, is focusing on digital technology as a way to diversify its economy away from crude oil and take advantage of a population that is becoming more connected and youthful. Startups in the fintech industry with valuations of $1 billion or more include Interswitch Ltd. and Flutterwave Inc.
A Binance representative noted that the goal of the strategy was to promote long-term economic growth through digital innovation:
“As we continue to support blockchain adoption across the African continent, Binance is keen to partner with the Nigeria Export Processing Zones Authority to establish a virtual free zone aimed at generating long-term economic growth through digital innovation. We look forward to sharing key details once plans are finalised.”
Binance and the Dubai World Trade Center signed a Memorandum of Understanding last December. By establishing a “new international ecosystem for virtual assets”, the memorandum seeks to establish Dubai as a hub for bitcoin and cryptocurrency-related goods and services.
Nigeria’s hostility to crypto has softened
The Central Bank of Nigeria issued a memo last February prohibiting regulated institutions from “dealing” in bitcoin or other cryptocurrencies. Peer-to-peer (P2P) bitcoin transactions increased by 27% in Nigeria as a result of the ban.
In fact, last year alone, P2P transactions in Africa as a whole surpassed all other countries in terms of volume. In the same period, Chainalysis published a global adoption index that ranked Nigeria among the top 10 nations in the world for bitcoin adoption.
BTC/USD falls below $20k. Source: TradingView
We can also look at current economic zones as Dubai and Nigeria work to create special economic zones that will help bitcoin and other cryptocurrencies. An example of a framework with flexible economy is the free city Próspera.
The government passed laws regulating the trading of digital assets this year, and the Nigeria Exchange Ltd. wants to launch a blockchain-enabled platform next year to expand trading on the stock exchange.
Since the value of cryptocurrencies began to decline in April, Nigerians have shown the most interest of any nation, according to a survey by price tracker CoinGecko.
