Three months after Nigeria’s central bank restricted financial institutions from dealing with anything crypto-related, peer-to-peer (P2P) Bitcoin trading in the country is having a heyday.
According to analytics platformUsefulTulips, Bitcoin P2P trading in Nigeria has surged by 27% since restrictions were introduced by the country's central bank (CBN).
90-day trading volumes in sub-Saharan Africa compared. Image: UsefulTulips.
"The CBN requested that banks and other financial institutions close the accounts of cryptocurrency exchanges in the country,” a spokesperson for Paxful, a leading P2P exchange in Nigeria, told Decrypt. However, as individuals are not banned from using cryptocurrencies, “peer-to-peer platforms like Paxful are not affected by the action," she added, noting that "as a result, all peer-to-peer services are seeing growth."
Nigeria is Paxful’s biggest market and the largest P2P market in sub-Saharan Africa. While P2P trading in Ghana and Kenya is also on the rise, almost $103 million was traded in Nigeria in the past 90 day period on P2P exchanges Paxful and LocalBitcoins—up from $80.6 million three months before.
The enthusiasm with which the country’s youth have taken to crypto means that Nigeria is often called Africa’s Bitcoin Nation; its trading volumes made records prior to the controversial ban.
"Africa will define the future (especially the Bitcoin one)”, tweeted Jack Dorsey, CEO of Twitter and payment provider Square, at the conclusion of a whirlwind tour of the continent last year.
Dorsey, a Bitcoin enthusiast, has concluded that African nations have the optimum conditions needed for crypto to flourish: weak local currencies, which make it harder to get the dollars needed for global trade; complex and costly money transfers, and—perhaps most importantly—an enthusiastic, youthful, te...
The price of Bitcoin has rallied by almost 500% since the start of its latest bull run at the end of 2020, hitting record highs of almost $65,000 this month before a pullback to $54,000.
And while Africa’s overall trading crypto volumes are tiny, a mere two percent of global volumes, the emergence of Bitcoin and other cryptocurrencies createlife-changing value here, compared to other regions.
Nigeria’s faltering economy sparks crypto action
Stringent capital controls on outflows, high transaction costs on international transfers, and a minimum transaction limit of $100 on card payments on international websites are among the factors contributing to the popularity of crypto in Nigeria, said Paxful’s spokesperson.
But the instability surrounding Nigeria’s currency, the Naira, is perhaps the key factor. According to the World Bank, up to 20 million Nigerians, or approximately 10% of the population, may be driven into poverty by 2022 largely due to the pandemic-relatedeconomic crisis; since President Muhammadu Buhari took office in 2015, the country's unemployment rate has quadrupled to 33%.
You don’t throw away the baby with the bath water. You don’t destroy Nigeria’s economy because of regime security. If you have issues with #Crypto#BitCoin, regulate it, but don’t eliminate it. Eliminate it and you eliminate jobs. And our youths need jobs! #EndSARS#TableShaker
Danny Oyekan, CEO and founder of blockchain investment company, Dan Holdings, told Decrypt that Nigerian users were largely responsible for transactions on his crypto payments app, Coins App, surpassing $21 million since its launch six months ago. “[The] ban will be met with action,” he predictedin February when the restrictions were announced.
P2P is where much of that action is taking place.
Daily Debrief Newsletter
Start every day with the top news stories right now, plus original features, a podcast, videos and more.
Block Earner, a Sydney-based fintech offering crypto yield and payment products, is pitching a new way for Australians to buy homes without selling their Bitcoin.
Rolling out what it calls Australia’s first Bitcoin-backed home loan, the crypto firm offers up to 50% of a property’s value as a deposit loan secured against the borrower’s Bitcoin.
The crypto is held in custody with Fireblocks, a digital asset security platform. Repayments can be made in either cash or crypto, and borrowers can exit...
Peter Thiel and his Founders Fund have acquired a 9.1% stake in BitMine Immersion Technologies, according to a Schedule 13G filing with the Securities and Exchange Commission on Tuesday.
The disclosure follows an announcement at the end of June that Founders Fund had invested in BitMine. The filing shows the Thiel-linked group acquired 5,094,000 shares across multiple entities.
Other participants in the raise in June included Pantera Capital, Galaxy Digital, and Kraken. BitMine also appointed Fu...
A Cantor Fitzgerald-backed investment vehicle is in late-stage discussions to acquire nearly $4 billion in crypto amid an industry surge in special purpose acquisition company activity.
Cantor Equity Partners 1, a blank-check vehicle led by U.S. Commerce Secretary Howard Lutnick’s son, Brandon, would receive as much as 30,000 BTC from Blockstream Capital founder Adam Back, The Financial Times reported on Tuesday, citing two sources familiar with the matter.
The agreement would also include rais...