Dania: Industry Collaboration Will Unlock Nigeria’s Digital Assets

Founder/CEO of Tradefada, a digital currency-trading platform, Seun Dania, who is also a founding member of Digital Currency Coalition, speaks about the factors militating against the growth of digital currency in Nigeria, and how industry collaboration will unlock Nigeria’s digital assets, among others. Emma Okonji presents the excerpts: 

Last year, the digital currency space suffered several policy summersaults, especially from the Central Bank of Nigeria (CBN). How will you rate the sector and what were the challenges that affected the growth of the industry in 2023?

The cryptocurrency sector in 2023 faced significant challenges due to policy shifts, particularly since there was a change in governments. I will rather describe it as a period of both consolidation and introspection. Key challenges included regulatory uncertainties and market volatility, which dampened growth prospects. However, 2023 wasn’t without its silver linings. Towards the year’s end, a new CBN administration emerged, ushering in a wave of clarity. Directives were issued to financial institutions, coupled with outlines for comprehensive regulatory frameworks. This shift towards structure and collaboration signaled a commitment to nurturing a responsible and thriving digital currency ecosystem, offering a glimmer of hope for the future.

Many Nigerians do not have confidence in the digital currency sector. Could it be as a result of lack of awareness or just fear of losing money?

While regulatory ambiguity eased in 2024, lack of awareness and fear of financial loss remain roadblocks to widespread digital currency adoption in Nigeria. Public education initiatives that demystify the complexities of the nascent field are crucial to building trust and encouraging participation. The onus lies on both the government and industry players to spearhead these efforts. We can see through the laudable initiatives for education in blockchain technology and AI of the current Minister for Communications, Innovation and Digital Economy, Dr. Bosun Tijani. So, it’s safe to say all these concerns will be allayed in the coming years. Investing in financial literacy programmes, partnering with educational institutions, and launching targeted awareness campaigns are vital steps towards bridging the trust gap. By equipping the public with the knowledge and tools needed to navigate the digital currency landscape responsibly, we can foster a more informed and engaged participant base.

Year 2024 is here, what are those things you believe government and players in the sector did not do well in 2023 and what must be done going forward to boost the industry?

As we step into 2024, the Nigerian digital currency sector stands at a critical juncture. To unlock its true potential, a collaborative approach is paramount. This requires the government, industry leaders, and consumer protection advocates to work in tandem to establish clear, consistent, and mutually beneficial regulations. A robust legal framework that fosters innovation while prioritising consumer safety is essential. Open dialogue and knowledge sharing between stakeholders will pave the way for a responsible and sustainable digital currency ecosystem, one that harnesses the transformative potential of this technology for the benefit of all Nigerians.

Beyond overcoming challenges, the Nigerian digital currency sector holds immense potential for positive transformation. Blockchain technology, which is the foundation of digital currencies, offers a plethora of potential applications in various sectors beyond finance. From supply chain management and healthcare record-keeping, to land titling and identity verification, the possibilities are vast. In 2024 and beyond, fostering research and development in these areas will be crucial. By supporting innovative startups and encouraging collaboration between established institutions and blockchain developers, we can unlock the transformative potential of digital assets across different sectors of the Nigerian economy.

As a major player in the digital currency space, what will be your outlook of the industry in 2024 going by the issues that happened in 2023?

The events of 2023 fueled a cautious optimism for 2024. With regulatory clarity on the horizon, we can anticipate increased involvement from institutional players like banks and financial institutions, drawn by the promise of secure and efficient digital transactions. This influx of expertise and resources will likely enhance market stability and drive adoption rates.

Furthermore, initiatives like the cNGN Naira stablecoin by the African Stablecoin Consortium, will add to the positive outlook. By bridging the gap between traditional and digital finance, such innovations hold the potential to revolutionise both the digital and real economy, fostering financial inclusion and economic growth across Nigeria. It is indeed a clear motivation, and I must commend the current administration and leadership of the CBN for its change in approach, which projects inclusivity and will indeed translate to the flow of Foreign Direct Investment (FDI) into Nigeria and will in turn usher in financial abundance.

The CBN recently issued guidelines on operations of bank account for Virtual Assets Service Providers. What do you think about this, and in what ways will the guidelines help the industry to grow better?

The CBN’s recent guidelines on operations of bank accounts for Virtual Assets Service Providers (VASPs) mark a significant step towards formalising the digital currency sector. The guidelines are expected to bring much-needed transparency to operations, boost investor confidence, and create a safer trading environment. The CBN’s recent actions demonstrate a willingness to collaborate with industry stakeholders, which is a promising development for the sector’s future.

There is a Digital Currency Coalition formed to promote digital currency in Nigeria, and also to support government in that regards. You are one of the founding members of the Coalition. Is that Coalition still active, and has it been able to come up with any policy document that the government can work with?

The Digital Currency Coalition remains a driving force in promoting responsible digital currency adoption in Nigeria. We actively engage with policymakers, developing comprehensive policy recommendations that address regulatory frameworks, innovative applications, and robust consumer protection measures. Our continued dialogue with the government underscores our commitment to working alongside stakeholders to build a thriving and responsible digital currency ecosystem that benefits all Nigerians.

You are the CEO/Founder of Tradefada, one of the leading digital currency trading platforms. How is Tradefada fairing even in the face of the various challenges in the industry?

Amidst the industry’s challenges, Tradefada remains a beacon of hope to local players, while we ensure high-end security and safety of users’ assets. We prioritize stringent security measures, diverse trading options, and comprehensive educational resources to empower our users. Our platform emphasises responsible participation through risk management tools and educational materials, fostering a safe and informed trading environment.

Without mentioning names, we have cases of digital currency trading platforms not been able to pay investors. What are the issues and how can they be addressed?

The unfortunate instances of some platforms failing to meet their obligations, highlight the need for stricter operational standards and enhanced accountability. Adherence to robust KYC/AML regulations, improved transparency, and effective risk management practices are crucial for preventing such occurrences in the future. Furthermore, promoting user education about platform risks and responsible investment practices is essential. By fostering a culture of informed participation, we can collectively build a stronger and more resilient digital currency ecosystem.

While the users/investors may have been greatly affected, I strongly believe that the industry is getting mature enough to ensure that all incidents are properly investigated, perpetrators brought to book and all users made whole.