On May 3rd, Nigeria’s Federal Ministry of Communications and Digital Economy (FMCDE) approved a national blockchain policy, signaling its support for the technology’s potential to “facilitate the development of the Nigerian digital economy and enable citizens to have more confidence in digital platforms.” Although the move was seen as a positive step for technology, the Nigerian government still appears reluctant to accept cryptocurrency, which is the most prominent use case for blockchain.
National Blockchain Policy Does Not Allow for Cryptocurrency
In July 2021, the Central Bank of Nigeria (CBN) banned banks from facilitating crypto transactions, citing terrorism financing and money laundering as reasons. It then asked banks to “close accounts of persons or entities involved in cryptocurrency transactions.” Although the national blockchain policy draft acknowledges the potential of cryptocurrencies, especially bitcoin, the government’s focus is on developing a regulatory framework for other use cases of the blockchain. In essence, the Nigerian government is still crypto-averse.
Government Trying to Be Seen as Pro-Blockchain
According to Christian Duffus, founder and CEO of blockchain startup Fonbnk, the blockchain policy may be the government’s way of sending a clear signal that it is not broadly against blockchain technologies, particularly after the publicity of its ban on crypto. The policy provides a framework for eNaira, the blockchain-powered digital currency released by the CBN.
Blockchain Policy’s Goals
The FMCDE’s goal is to create a blockchain-powered economy that supports secure transactions, data sharing, and value exchange between people, businesses, and government. The policy serves as a government-led approach to the adoption of blockchain technology in Nigeria, with the overarching goal of promoting collaboration for blockchain-related innovation in the country. Initiatives outlined in the policy’s strategy framework include the promotion of blockchain business incentives programs and the establishment of a national blockchain sandbox for proof of concepts and pilot implementation.
Government Must Drive Implementation
Oluwatobiloba Ajayi, a blockchain expert and founder of B2B crypto startup Ivory Pay, believes that the national blockchain policy will not help crypto significantly because it takes control and oversight of finances off the government’s watch. However, Ajayi thinks that the government must drive the implementation of the policy and integrate the technology into its systems for it to work.
The policy is a big deal, but for it to be successful, the Nigerian government must be at the forefront of its implementation. Nnamdi Uba, the CEO of HouseAfrica, a startup that leverages blockchain to solve land title ownership in Africa, has been working on the policy for three years. He believes that blockchain can help in many ways, including the tokenization of properties, supply chain tracking, and authentication of documents.
Conclusion
Nigeria’s approval of a national blockchain policy is a positive move towards adopting the technology. However, the government’s reluctance to accept cryptocurrency might be a drawback for crypto-related businesses. Despite this, the policy’s initiatives and goals show that the Nigerian government is open to blockchain-related innovation and collaboration.
