February 2022 marks one year since the Central Bank of Nigeria (CBN) placed a ban on banks from facilitating cryptocurrency trading. Despite this restriction, crypto trading has been thriving in Nigeria, Africa’s biggest economy.
Despite increasing scams in the Nigerian crypto market, demand for P2P trading has seen significant growth over the past years.
New data shows that peer-to-peer Bitcoin trading volume has increased over 16% since the CBN restriction last year. Nigeria continues to champion crypto adoption in Africa.
Bitcoin P2P trading surges over 16% since the banking ban on crypto trading
Data from UsefulTulip, a website that tracks peer-to-peer Bitcoin trading across the world, shows that Bitcoin trading in Nigeria has been on the increase. In the last year, peer-to-peer Bitcoin trading volume had surged by over 16% in the country. This has been despite an existing ban the country’s highest financial body, the Central Bank of Nigeria (CBN) placed on Nigerian banks from facilitating crypto trading exactly a year ago.
Cryptocurrency has no place in our monetary system at this time, and cryptocurrency transactions should not be carried out through the Nigerian banking system, Godwin Emefiele, the governor of the CBN said at the time.
The CBN ban, while not forbidding crypto trading, created difficulties for Nigerian crypto investors. As banks are not available to help with making direct deposits to crypto exchanges, Nigerians largely resorted to trading on peer-to-peer platforms like Paxful, LocalBitcoins, and Binance.
However, the government has also been clamping down on citizens it suspects of still carrying out crypto trading through banks.
Amidst the banking restriction on facilitating crypto trading, the CBN has gone ahead to release a Central Bank Digital Currency (CBDC), the eNaira, making Nigeria one of the first countries to do so.
Africa is one of the rising stars in crypto adoption globally
Nigeria’s high peer-to-peer Bitcoin trading volume has contributed significantly to the adoption of crypto in Africa. Data from UsefulTulip also shows that Sub-Saharan Africa has had one of the highest Bitcoin P2P trading volumes in the world, rivaling volumes in North America.
Other African countries where digital currency adoption is rapidly rising include Kenya, Mali, and South Africa. Like Nigeria, financial regulators in these countries are also looking into the growing trend and thinking of ways to protect investors. South Africa’s Financial Sector Conduct Authority (FSCA) recently issued two consumer warnings against FTX and Bybit crypto exchanges.
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