While the country has a high rate of poverty, it also has the largest economy in Africa. Some of the thanks should be attributed to the influx of bitcoin and other cryptocurrencies into the Nigerian economy. Today, Nigeria is still regarded as Africa’s largest bitcoin trading market by volume.
The constant fall of the Nigerian Naira further prompted the acquisition of Cryptocurrency, a sure way of investing one’s money. In the long run, it became more than that for Nigerians as they began to trade these cryptocurrencies to make a living including using them to make international payments to avoid exchange charges.
Peer to peer (P2P) crypto exchange platforms slowly became a norm and eventually, a big game-changer for crypto trading. This is because these platforms allowed Nigerians to carry out legitimate and affordable transactions on any scale.
Popular P2P crypto exchange companies like Binance have since then, found a productive seat in the country as they made the process of Cryptocurrency transactions very easy with Nigeria’s financial institutions. However, This transactional luxury was not allowed to grow as much as it should have in the Nigerian economy as it was cut off at a point when it was getting to its peak.
On the 6th of February 2021, the Central Bank of Nigeria ordered all financial institutions to close down all accounts associated with Cryptocurrency transactions. There was an immediate ban on all transactions involving P2P platforms and Bank accounts. This announcement was followed by Panic, anger and backlash from Nigerians as a good number of them were worried about their golds (cryptocurrencies).
The goal of the ban according to the CBN Governor, Godwin Emefiele, was not to deter people from trading cryptocurrency but to re-enforce an order that had been in place since 2017 prohibiting cryptocurrency transactions in the country’s banking sector.
However, days later, News came from sources close to the CBN governor, Godwin Emefiele, that the ban was only on the transactional relationship between crypto business and any of CBN’s financial institutions and not against crypto traders. This meant one could go ahead with buying and selling bitcoin but cannot withdraw it into a bank account like before.
One would think that this news would frustrate the stand of cryptocurrency in the country, but then the unexpected opposite happened. Many Nigerians, even with the rage of the ban, swore to continue trading Cryptocurrency.
According to new data, Nigeria still tops the chart for African countries that participate in bitcoin trade. As of the 14th of April 2021, Nigeria was said to have in the last 90 days, recorded about 100 million dollars in bitcoin trade volume via p2p platforms. The CBN’s directive against cryptocurrency withdrawals went ahead to boost Nigeria’s bitcoin trade volume as Nigerians indeed found an alternative way to trade cryptocurrencies.
Two persons can connect directly and trade cryptocurrency. In return for bitcoin or other cryptocurrencies, one of them can make a bank transfer directly to the other or even pay that other person with cash.
Although P2P crypto exchanges such as Binance allow the exchange of Cryptocurrency, they remain affected because their partners with the Naira are no longer willing to work with them due to this directive thereby halting naira deposits to exchanges.
While Nigeria was placing a ban on crypto-related transactions in its financial institutions, African countries like Kenya and Ghana have tactically endorsed cryptocurrency. The central bank of Ghana has reportedly set up a central sandbox that especially considers blockchain-based business as well as cryptocurrency startups.
This could be the reason why Kenya and Ghana come in 2nd and third respectively, overthrowing South Africa but with trade volumes not even remotely close to that of Nigeria.
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