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Nigerian Bitcoin P2P trading up 16% since CBN crypto ban

A year ago, Nigeria’s central bank banned cryptocurrency transactions from the country’s financial system.

Cryptocurrency transactions in Africa’s largest crypto market are on the rise, despite efforts by the country’s central bank to discourage them.

Annually, Nigerian peer-to-peer transactions increased by 16 percent. On the two biggest P2P platforms (Paxful and Localbitcoins), Nigeria’s volume presently stands at $400 million, followed by Kenya with more than $160 million and South Africa with $117 million.

P2P

Peer-to-peer BTC exchanges do not require a centralised authority and are between individuals (such as individuals).

A growing number of Nigerians are using their banks to settle their Bitcoin trades in cash, despite the fact that peer-to-peer trading is decentralised.

There are currently more than 17,000 digital currencies in existence, most of which are referred to as “altcoins,” or alternative currencies. If you’re reading this, chances are you already know something about Bitcoin. Cryptocurrency has become a widespread notion.

Reservations by the Nigerian government for cryptocurrencies
  • However, Nigeria, like many other countries, has taken an anti-crypto stance. It’s even gone so far as to aggressively and harshly respond against digital currencies at several points.
  • CBN Governor Godwin Emefiele claimed that the bank’s decision in February 2021 not to allow deposit money banks, non-banking institutions, and other financial institutions to support cryptocurrency trading had been in Nigerians’ best interests.
  • When it comes to cryptocurrency transactions, “the Nigerian financial system should not handle them since they have no place in our monetary system at this moment.”
  • When asked whether or not crypto failed critical tests of vulnerability and risk by the Nigerian Financial Intelligence Unit (NFIU), Director Tukur Moddibo noted that his organisation had thwarted a $3 million fraud that included 20 bank accounts.

Throughout the country, crypto aficionados reacted angrily to this restriction. This led to the creation of eNaira, Nigeria’s own version of Bitcoin. The currency will be launched on October 25, 2021, according to the Central Bank of Nigeria (CBN).

To get their hands on these digital assets, Nigerians must now pay a premium, as the only legal alternative is P2P trading with the world’s most popular cryptocurrency being offered on Africa’s largest crypto market.

Due to the directive issued by the Central Bank of Nigeria, payment partners who accept Nigerian naira are no longer ready to work with crypto exchanges.

According to Nairametrics’ most recent statistics, bitcoin traded at a premium of more than 40% over the official Nigerian exchange rate on various P2P exchanges and other non-traditional channels (N580 to $1).

Bottomline

In spite of Nigeria’s central bank’s ban on crypto transactions through its banking institutions, Africa’s most populous country is ready to pay a premium to store and purchase Bitcoin.

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