Despite regulatory challenges and a recent clampdown on cryptocurrency activities by Nigeria’s central bank, the country’s blockchain startups are experiencing significant growth. On February 18, 2021, industry experts reported that Nigerian blockchain companies are finding ways to thrive by adapting to new circumstances and diversifying their business models.

The Central Bank of Nigeria (CBN) had earlier issued a directive banning financial institutions from facilitating cryptocurrency transactions, citing concerns over illicit activities and lack of regulatory oversight. This decision created uncertainty in the blockchain and cryptocurrency space, with many fearing it would stifle innovation in a growing sector.

However, blockchain entrepreneurs in Nigeria have been quick to pivot and adapt. Many startups have shifted their focus from cryptocurrency exchanges to other blockchain-based services, such as decentralized finance (DeFi), smart contract solutions, and blockchain for supply chain management. By doing so, they are tapping into the broader potential of blockchain technology beyond cryptocurrency.

“Nigerian blockchain startups are proving resilient despite regulatory uncertainty. They are leveraging blockchain for practical applications that address real-world problems in sectors like finance, agriculture, and logistics,” said Chimezie Chuta, Founder of Blockchain Nigeria User Group.

One of the startups at the forefront of this growth is KoinKoin, a Lagos-based blockchain firm that specializes in cross-border remittances using blockchain technology. In response to the regulatory changes, KoinKoin has expanded its services to offer blockchain-powered solutions for businesses, helping them to streamline operations and reduce costs.

In addition, several Nigerian blockchain firms are participating in global accelerator programs and receiving international recognition. These firms are attracting venture capital funding and forming partnerships with companies abroad, further demonstrating the growing influence of Nigeria’s blockchain industry.

While the regulatory landscape remains uncertain, the Nigerian government has expressed a willingness to explore blockchain applications, particularly in non-cryptocurrency sectors. In January 2021, the Nigerian Securities and Exchange Commission (SEC) indicated plans to work on a regulatory framework for digital assets, which could provide clarity and support for blockchain innovators.

Despite these challenges, Nigeria remains a leading hub for blockchain technology in Africa. Industry leaders continue to advocate for regulatory reforms that will foster innovation while ensuring compliance with financial regulations. As blockchain startups navigate these hurdles, they are positioning Nigeria as a key player in the global blockchain ecosystem.