Between January 2021 and June 2022, Nigerians exchanged N497.35 billion ($1.16 billion) in Bitcoin, demonstrating the growing importance of virtual currency in the country. This is true despite Nigeria’s Central Bank’s ban on the use of cryptocurrencies.
The CBN stated in February 2021 that trading in cryptocurrencies or enabling payments for cryptocurrency exchanges is forbidden. This was in addition to past regulatory directions on the topic.
However, according to data from Paxful, one of the country’s most popular peer-to-peer networks, Nigerians transacted $1.16 billion worth of bitcoin during the course of the previous 18 months.
Nigerians traded N428.75 billion ($760 million) worth of BTC in 2021, which amounted to six million deals, or over 16,000 trades each day. The firm further stated that Nigeria became its largest country based on trade volumes within the year.
The firm said, “Nigeria is our largest country based on trade volume — over $760m in trade volume last year. In 2021, we also saw over 6 million successful trades in Nigeria, which breaks down to over 16,000 trades each day.
“Globally, we saw nearly $3bn in trade volume on Paxful last year.”
Within the first six months of 2022, BTC trade from the nation had reached about N171.50bn ($400m), on track to beat the 2021 figures.
The firm added, “And despite the global financial crisis, Paxful is seeing that peer-to-peer and interest in Bitcoin are not slowing down.
“In the first half of 2022, trade volume in Nigeria reached nearly $400m, showing us that the emerging markets are still hungry for Bitcoin.”
Paxful is not the only P2P platform selling BTC and other cryptocurrencies in the nation. Others such as Binance, BuyCoins and co have a strong presence in the nation but official figures regarding their national transaction volumes are almost non-existent. Since the CBN banned banks from facilitating crypto transactions, Nigerians have had to rely on P2P platforms for their crypto transactions.
According to Chainalysis’ 2021 Global Crypto Adoption, Nigeria is the 6th leading country in the world in terms of cryptocurrency adoption, because of the resilience of its peer-to-peer monetary systems.
In its ‘Capital Flow Management Measures in the Digital Age: Challenges of Crypto Assets,’ report, the International Monetary Fund disclosed that crypto assets appealed to countries with younger populations.
It stated that countries with weak economic fundamentals were likely to witness a surge in crypto adoption because their population would perceive crypto as a hedging instrument against exchange rate and inflation.
The Founder and Coordinator, of Blockchain Nigeria User Group, Chimezie Chuta, had earlier stated that the P2P nature of BTC was driving its increasing adoption in the nation.
He said, “Crypto is designed to be P2P and the only way we started talking about bank accounts is for easy offloads or what we call unwrap.
“If people are confident or comfortable with just exchanging crypto to crypto in the P2P environment, then there is nothing that can stop it. And that is what happened after the CBN banned crypto and most of the trading went to P2P. P2P is person to person, there is nothing that can happen to that.”
The President of Stakeholders in Blockchain Technology Association of Nigeria and General Secretary of Blockchain Industry Coordinating Committee of Nigeria, Senator Ihenyen, said it was time for the CBN a rethink its stance on crypto.
“Yes, I strongly believe that it is time the CBN had a rethink of its stance on crypto in Nigeria. No doubt, the CBN must have had compelling reasons for shutting out cryptocurrency in the country’s banking and financial system in February 2021.”
In 2021, the Minister of State Budget and National Planning, Clem Agba, urged the Federal Government to regulate the crypto industry.
