“They would rather buy Bitcoin”: Paxfuls Nena Nwachukwu

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In October, police corruption in Nigeria hit a low point when reports of a special anti-theft squad (SARS) officer killed a young boy. Week-long protests across the country followed.

The authorities tried to quell the protests by freezing the organizers’ bank accounts. But bitcoin came to the rescue.

While the authorities were certainly successful in preventing protesters from sending and receiving naira, they also underestimated people’s trust in cryptocurrency and encouraged many to use bitcoin for the first time.

Nena Nwachukwu will speak at CoinDesk’s Crypto State event in Lagos on July 8.

Nena Nwachukwu, Nigeria Regional Director at Paxful since 2020, is at the forefront of the cryptocurrency industry in Nigeria. Paxful is a peer-to-peer cryptocurrency marketplace that allows buyers and sellers to meet and trade different cryptocurrencies across nearly 400 payment options. According to data shared with CoinDesk in January, Nigeria is Paxfuls’ largest market, making the country a key player in the crypto industry.

Currently, the company offers bitcoin, ethereum, and stablecoin tether. Nwachukwu joined Paxful last year after working for Chinese cryptocurrency trading platform Huobi in Dubai, where she was responsible for the company’s expansion in the Middle East and Africa. At Paxful, she focuses on business operations and new product development while managing VIP client accounts.

Nwachukwu, who will be speaking at the CoinDesks Crypto State event on July 8, discusses Nigeria’s significant uptake of crypto adoption and entrepreneurship, which has made the country one of the most big cryptocurrency adapters to the world, according to Statista.

The following has been edited slightly for brevity and clarity.

CoinDesk: Nigeria is the leader in crypto trading. How has the adoption of crypto in Nigeria evolved?

Nena Nwachukwu: When crypto first became popular in Nigeria, before October 2020, a lot of people had heard about cryptocurrency or bitcoin, but no one really knew or cared what it was only a few select people. who were tech-savvy. In Nigeria we have a lot of economic and regulatory issues and unemployment and people have always been interested in finding an alternative source of income.

What was the main event that pushed people into crypto?

Bitcoin happened in 2020, during the protest against police brutality, when the government blocked organizers from accepting donations with their bank accounts, which led promoters to use cryptocurrency and bitcoin as means of payment. This was the main change because this protest lasted about two weeks. People were talking about how the organizers would pay for medical emergencies or how they would pay for those on the front lines protesting all day, all night. Bitcoin has become very popular because it entered the discussion. Now almost everyone in Nigeria, even my mom and dad, who never cared what I was doing, are wondering about bitcoin.

They prefer to buy bitcoin and take that risk.

Is cryptocurrency in Nigeria a way to escape poverty and unemployment?

I wouldn’t say people use it to escape poverty because a lot of people who are into cryptocurrency already have basic access to tools. However, what it has done is that it enables financial empowerment, and one of the ways to do that is cryptocurrency trading.

People don’t just trade within the country. They also trade across borders with other African countries. We find a lot of Nigerian traders trading with Kenyans, Chinese or Americans. One of the ways an early analysis shows cryptocurrencies have helped Nigerians is through cross-border payments. There are a lot of capital controls in Nigeria. When using your debit or credit card, you cannot spend more than $ 400 per day on any ecommerce platform outside of Nigeria. It’s a big challenge.

Cryptocurrency made this possible. You find a lot of businessmen, traders and small businesses who mainly import their goods from countries outside of Africa which is very difficult, make payments or pay their vendors with cryptocurrency. Nigeria also has a very large brown community that needs to send money home, and you find a lot of them starting to use cryptocurrency as well.

Then, like everywhere else in the world, people use it to speculate, or to invest. There are also crypto enthusiasts who trade the difference in currency prices. Of course, some use it to cover themselves because the naira [Nigerias currency] has been devalued several times since last year and currently $ 1 is equivalent to [about 411 naira], which is extremely high. So you find people buying cryptocurrency as a way to store the value of their wealth instead of losing it every day. [if it is stored in naira]. They prefer to buy bitcoin and take that risk.

In February of this year, Nigeria’s central bank imposed a ban that prevents financial intermediaries from processing transactions for crypto exchanges. What happened there?

This is an interesting question, which at first we didn’t like to talk about, but now luckily the central bank has clarified the position. When news first broke earlier this year, the trending topic was that the central bank was banning cryptocurrency trading. However, they returned to clarify that cryptocurrency was not banned as they knew they could not track the currency. Banks and non-bank financial institutions have been barred from supporting cryptocurrency payment companies, so if a cryptocurrency company wants a bank account, they are no longer allowed to own that bank account. But the central bank clarified that they were not stopping trading.

So how has this changed the behavior of people around crypto?

When something like this happens, you would think people would stop trading cryptocurrency, but it actually got more people interested. It works a bit backwards here. When the government bans something, it makes people more curious. After the ban was applied, we saw a lot of interest. Indeed, the trade [on Paxful from February to March 2021] increased by about 23% after the ban. The trade itself was not prohibited, so now there are even more people [in the bitcoin movement]. People are also watching dogecoin, which is always trending on Twitter here. Trade hasn’t slowed down at all, and I don’t think it will anytime soon because, again, the naira is devaluing and people are very interested in preserving the value of their wealth.

My only concern is that our government and our regulators will be left behind if they don’t find common ground to work with everyone.

Could there be a way to work with the government?

We will always be open to liaising with the government because we understand their concerns and they are trying to protect the economy, which is their job and what central banks exist for. In fact, we have had a dialogue with the central bank and the FinTech Association of Nigeria to hear them on the new solutions being offered, what their concerns are, etc. We were happy to work with them and find common ground because at the end of the day the banks lose money (if people stop selling naira and exchange bitcoin instead.)

Nigerian officials say part of the reason crypto was banned is that it could be used to finance terrorism. Is this a valid thought?

Terrorism existed before crypto. I don’t entirely agree that this is a valid thought. I see what they mean because by the nature of cryptocurrency it’s anonymous, but we can actually track cryptocurrency transactions. Anyone who trades on a crypto platform must register. For Paxful, you need to provide proof of address and we need to verify it, so technically it’s not anonymous.

What is the long-term impact of governments’ position?

My only concern is that with this ban in place, our government will not be able to take advantage of the opportunities that cryptocurrency presents, like El Salvador does. But when it comes to adoption, I don’t see any danger. So far this has been good for us because with the many restrictions we have with international payments it has eased the pain a bit, and in the long run I see more adoptions coming. My only concern is that our government and our regulators will be left behind if they don’t find common ground to work with everyone.

Do you think bitcoin could be legal tender at some point in Nigeria?

Unless they find a way to control bitcoin and I think that’s why China is cracking down on it so hard I don’t see it being legal tender any time soon. However, they might have a central bank digital currency, which the central bank is already working towards, but bitcoin is becoming legal, I don’t see it at the moment.

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