Despite the Central Bank of Nigeria’s restrictions on cryptocurrency transactions, Nigerians traded at least N77.75 billion ($185 million) in Bitcoin in the first three months of the year.
According to data provided to our correspondent by Paxful, one of the country’s major peer-to-peer cryptocurrency platforms, this represents a 5.71 percent increase from the N73.54bn worth of Bitcoin traded in the same period in 2021.
Nigerian trade accounted for 25.87 percent of the total N300.48bn ($715m) in Bitcoin traded on the platform in the quarter under review.
Global trade on the platform increased by 8.33 percent from N277.377 billion ($660 million) in the same period in 2021.
Nigeria was the firm’s largest trading country in 2021, with 16,000 daily trades, according to the firm. During the time period under consideration, the market capitalization of Bitcoin fell by $36.90 billion, from $902.10 billion on January 1, 2022, to $865.20 billion on March 31, 2022.
Despite the CBN’s restrictions on cryptocurrencies in the country. The CBN asked banks in the country to stop transacting in and with entities dealing in crypto assets in February 2021.
“Further to previous regulatory directives on the subject, the bank wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited,” the bank stated.
P2P trading of cryptocurrency, particularly BTC, has increased since the restriction. According to Chainalysis’ 2021 report, the country ranks sixth in the world in terms of crypto adoption.
“If people are confident or comfortable simply exchanging crypto for crypto in a P2P environment, then nothing can stop them.” That is exactly what happened after the CBN banned cryptocurrency, and the majority of trading shifted to P2P. Nothing can happen to P2P because it is person to person.
“So, when you exchange whatever you need to exchange on the digital platform, you send people funds to their local accounts.” It is expected because the system is decentralized and disruptive enough to allow for such events.”