Nigerian State Signals Pro-Blockchain Stance with Ethereum L2 Partnership

• A Nigerian state is seeking to position itself as pro-blockchain despite a national crackdown.
• The plans to transform governance are made possible through partnership with an Ethereum Layer 2 developer.
• Regulators have slowly been shifting their body language around crypto in the region.

In recent months, the Nigerian crypto scene has been rife with uncertainty amid a crackdown over claims of currency manipulation, money laundering, and terrorism financing that have culminated in lawsuits against Binance and one of its executives, who has been detained in the country for over six months.

Against this backdrop, however, a state in the country seeks to separate itself from the anti-crypto narrative and attract blockchain innovators. The state has recently announced a partnership with an Ethereum Layer 2 chain developer to enhance governance, showing its commitment to the technology.

Edo State Partners INTMAX 

The Edo State government wants blockchain technology to enhance governance and service delivery. On Tuesday, August 27, the state Ministry of Digital Economy, Science, and Technology announced a partnership with ZK-powered Ethereum Layer 2 developer INTMAX to integrate blockchain technology across several government parastatals and operations.

Commenting on the development, the ministry’s commissioner, Ifaluyi Isibor, tipped the partnership to revolutionize “everything from payments to record-keeping.”

"We look forward to working with INTMAX to develop practical solutions that will enhance Edo State’s ability to deliver key services. This partnership provides us access to a secure and low-cost network that can be used for everything from payments to record-keeping, and we’re confident that the collaboration will yield tangible results while showing that Nigeria remains receptive to Blockchain technology," he asserted.

As highlighted by Isibor, with the move, Edo State also intends to show its faith in the transformative power of blockchain technology and its willingness to support its growth despite the recent crypto crackdown at the federal level. The state noted that it hoped to inspire other states to follow suit through the anticipated results of its INTMAX partnership.

The Edo State-INTMAX partnership announcement comes as federal regulators shift their body language on crypto again.

Crypto Taxation Rules and Licenses Coming?

At the peak of the recent crypto crackdown in May 2024, many had feared a 2021-esque ban on the asset class. The fears came as regulators instructed fintechs to report and freeze the accounts of users engaging in crypto p2p trading after forcing several exchanges to shut down their naira p2p marketplaces.

Fast forward to August 2024, however, and the conversation is now shifting to implementing regulations and issuing licenses to exchanges. 

On August 17, Zaach Adedeji, the chair of Nigeria’s tax authority, the Federal Inland Revenue Service, disclosed that the agency is set to introduce guidelines for crypto taxation in a sweeping tax reform bill. At the same time, the country’s SEC disclosed on August 20 that it intended to issue crypto licenses as early as this month.

SEC Director Emomotimi Agama told Bloomberg that the agency intended to create a path for Nigerians to engage in the crypto market that afforded the government sufficient oversight.

On the Flipside 

• INTMAX’s Layer 2 network has yet to go live on the mainnet, but it is scheduled to launch in Q4 2024.
• Nigerian regulators remain locked in legal battles with Binance. They are attempting to hold a mid-level manager with no decision-making power at the firm accountable for its alleged crimes.

Why This Matters

The future of crypto and blockchain in Nigeria looked significantly dim again amid the recent crackdown on crypto exchanges. However, moves like the Edo State government’s INTMAX partnership suggest that there may still be hope.

Read these for more on Nigeria’s crypto scene:
Nigeria’s SEC Set to Issue Crypto Licenses in Major Body Language Shift Binance’s Gambaryan Still Detained After 6 Months: Where Are the Answers?