The Nigeria Export Processing Zones Authority (NEPZA) has teamed with crypto FX Binance to create a virtual free zone for blockchain development.
The NEPZA said that early discussions with Binance over the establishment of the virtual free zone—the first of its type in West Africa had taken place.
The NEPZA’s managing director, Adesoji Adesugba, said that the zone will be similar to Dubai’s virtual free zone, whose rules and incentives are tailored to accommodate crypto companies.
“Our goal is to engender a flourishing virtual free zone,” Mr. Adesugba said. “[In order to] take advantage of a near trillion dollar virtual economy in blockchains and digital economy”
The initiative comes right after last October’s launch of “eNaira”, Nigeria’s central bank’s digital currency. eNaira became the world’s second digital currency, after the Bahamas’ “sand dollar”.
Since then, the eNaira has been utilized for transactions totaling 4 billion nairas ($9.2 million) by the end of August.
Cryptocurrency in Nigeria
Nigerians are among the most passionate Africans when it comes to adopting cryptocurrencies and blockchain technology.
The United Nations Conference on Trade and Development (UNCTAD) has ranked Nigeria third among African nations with the biggest number of cryptocurrency holders. Today, Nigeria has over 13 million Nigerians owning digital assets.
According to kucoin, 35% of Nigerian adults are cryptocurrency investors.
Authorities, however, have been less receptive to cryptocurrency in the past.
The central bank forbade banks from providing services to cryptocurrency exchanges in February 2021.
In November 2021, it was reported that the central bank requested banks to freeze the accounts of at least two cryptocurrency traders.
With the announcement of the country’s digital currency eNaira, the Nigerian government appeared to better welcome the idea of digital assets in the country.
Nigeria has had a crescent depreciation of its physical currency in the last couple of years. That constant loss in value of the Naira made Nigeria’s citizens more open to the idea of digital currencies.
Cryptocurrency Expansion in The Middle East
The Middle Earth is one of the largest expanding crypto-friendly territories in the world.
Similar to Nigeria, Cambodia closed a deal with Binance in June 2021 in order to create a regulatory framework for digital assets.
The most populated city in the United Arab Emirates, Dubai also has deep connections with cryptocurrencies. The capital has its own digital asset, known as emCash, and one of its largest banks, RAKBANK, is close to allowing its customers to trade other cryptocurrencies using Emirati currency.
Binance and the Dubai World Trade Centre Authority also inked a contract in December 2021 under which Binance pledged to assist various digital currencies and assets in obtaining a license in Dubai.
The contract also looks to permit trading in digital currencies in one of Dubai’s free zones.
As the UAE looks to establish itself at the center of the rapidly expanding industry, the deal will enable the free zone’s authorities to provide licenses to digital currency enterprises.