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Nigeria’s cryptocurrency peer-to-peer (P2P) market could surge to billions of dollars despite increasing regulatory crackdowns by the government.
Ray Youssef, CEO of Nigeria’s prominent cryptocurrency platform, Noones, disclosed that P2P transactions in the country alone could amount to approximately $500 billion. Youssef’s remarks come amidst mounting regulatory scrutiny over cryptocurrency activities in Nigeria.
In an interview with Techpoint Africa, Youssef highlighted the rapid growth of P2P transactions, especially in light of looming cryptocurrency bans within the country. He noted that while the reported annual volume of cryptocurrency transactions in Nigeria stands at $59 billion, the actual figure could be ten times higher, reaching the $500 billion mark.
According to Youssef, a significant portion of P2P transactions bypass traditional cryptocurrency platforms like Binance, occurring instead on platforms such as WhatsApp, Telegram, and even in local coffee shops and streets across the nation. He suggested that the reported $59 billion volume largely underestimates the true scope of P2P trading, which is far more widespread.
The regulatory environment surrounding cryptocurrency in Nigeria has been tumultuous. In February 2021, the Central Bank of Nigeria issued a circular directing financial institutions to close accounts associated with cryptocurrency transactions. However, the ban was later lifted during President Bola Tinubu’s administration, albeit with stringent regulations governing virtual asset service providers.
Following the ban’s lifting, the Central Bank uncovered alarming findings, including $26 billion in untraceable transactions processed by Binance, a global cryptocurrency exchange. This revelation prompted a crackdown on Binance and the freezing of over 1,000 bank accounts involved in P2P transactions.
Despite government actions, many Nigerians, particularly P2P traders, have criticized the scapegoating of cryptocurrency for currency devaluation. Economist Kalu Aja highlighted the deteriorating state of the Nigerian economy, citing factors such as exchange rate pressures, rising inflation, and security challenges as contributing to economic decline.
Amidst these challenges, the cryptocurrency market in Nigeria remains resilient, navigating regulatory pressures while fueled by growing distrust in traditional financial systems.
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