Major crypto exchange Binance is expanding its presence in Africa by launching a partnership with Nigeria’s authorities to build a Dubai-like digital economic zone.



"Our goal is to engender a flourishing virtual free [zone] to take advantage of a near trillion dollar virtual economy in blockchains and digital economy," Adesoji Adesugba, Managing Director of the Nigeria Export Processing Zones Authority, was quoted as saying in a statement. No further details about the project were provided.

Last year, a report released by blockchain analysis company Chainalysis ranked Nigeria as the sixth country in the Global Crypto Adoption Index, preceded by Vietnam, India, Pakistan, Ukraine, and Kenya, respectively.

In late October 2021, Nigeria’s President Muhammadu Buhari launched a central bank digital currency (CBDC), eNaira, with the aim to enhance the operations of the country’s payments system. Back then, the central bank said that the project will continue "with a series of further modifications, capabilities, and enhancements to the platforms."

In August this year, the Central Bank of Nigeria Governor Godwin Emefiele said that the eNaira has been used to carry out transactions worth NGN 4bn (USD 9.2m) since its introduction in October 2021, adding that the eNaira app has been downloaded 840,000 times and had about 270,000 active wallets in August.
The Nigerian government could be reportedly working with crypto exchange Binance in order to establish a special economic zone to boost crypto and blockchain-related businesses. The two stakeholders have been reportedly conducting preliminary talks regarding the same.

As per the Nigeria Processing Zones Authority (NEPZA), the partnership seeks to build a digital hub “similar to the Dubai virtual free zone”. Africa’s most popular nation Nigeria is looking to diversify its economy away from crude oil and into digital technology.

Adesoji Adesugba, managing director of NEPZA said that the proposed zone will be the first in Africa. Thus, alike Dubai’s virtual zones, this zone seeks to provide crypto-friendly laws, regulations, and tax incentives to crypto businesses.
Nigeria boasts one of the highest rates of crypto adoptions across the globe. As per the recent survey from Triple-A, Nigeria has more than 22 million crypto users. As per Adesoji Adesugba, the special economic zone would help develop Nigeria’s digital economy and also “widen employment opportunities” for its citizens. This will also fuel their vision to drive crypto adoption in the West African countries. He added:

Our goal is to engender a flourishing virtual free zone to take advantage of a near trillion dollar virtual economy in blockchains and digital economy. We seek to break new grounds to widen economic opportunities for our citizens in line with the mandate of the Authority, the directive of the Honorable Minister and the economic development agenda of President Muhammadu Buhari.

Nigeria actively working on its CBDC e-Naira
Crypto adoption across Nigeria has continued to grow amid unstable government policies and an inadequate financial system. As a result, the Nigerian government has also enacted regulations for the trading of digital assets. Furthermore, Nigeria Exchange Ltd. also plans to introduce a blockchain-enabled platform next year to deepen trade at the bourse.

Last year in October 2021, Nigeria launched its central bank digital currency (CBDC) e-Naira. Since then, it has seen close to one-million adopters of e-Naira. Now, the central bank of Nigeria is planning to boost e-Naira adoption tenfold over the next 12 months by specifically attracting people without a bank account.

During its second phase of CBDC expansion, the central bank is targeting 8 million users of e-Naira. Last month, Nigeria’s central bank Governor Godwin Emefiele said:

Just like the naira, the e-naira is expected to be available to all Nigerians and will provide more possibilities to bring the unbanked into the digital economy.

We don’t have a choice but to live with the fact that we are now in a digital economy. The use of cash will dissipate to zero and the use of digital currency will increase to become part of our lives.