Nigerians traded at least N77.75bn ($185m) worth of Bitcoin in the first three months of the year despite Central Bank of Nigeria restrictions on cryptocurrency transactions in the country.
This is an increase of 5.71% from the value of N73.54 billion Bitcoin that was traded in the corresponding period of 2021, according to the data that Paxful made available to our correspondent, a major cryptocurrency peer platform. country-to-peer. .
Nigerian trading accounted for 25.87 percent of the total N300.48bn ($715m) value in Bitcoin that was traded on the platform in the quarter under review.
Global trade on the platform showed an increase of 8.33% over the 277.377 billion naira ($660 million) traded on it in the corresponding period of 2021.
According to the firm, Nigeria was its largest trading country in 2021 with 16,000 daily exchanges. In the period under review, BTC’s market capitalization dropped by $36.9 billion from $902.1 billion as of January 1, 2022 to $865.2 billion as of March 31, 2022.
This was despite CBN’s restrictions on cryptocurrencies in the nation. In February 2021, the CBN called on the country’s banks to stop transacting in and with entities that trade crypto assets.
The bank said: “In addition 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.”
Since the restriction, P2P trading of cryptocurrencies, especially BTC, has increased. According to a 2021 report by Chainalysis, the nation is the sixth leading nation in the world in terms of cryptocurrency adoption.
A recent report by KuCoin, a crypto exchange with over 10 million registered users, revealed that around 33.4 million Nigerians trade or own crypto assets.
According to the founder and coordinator of the Blockchain Nigeria user group, Chimezie Chuta, the P2P nature of BTC is the cause of its increasing adoption in the nation.
He said: “Crypto is designed to be P2P and the only way we start talking about bank accounts is for easy downloads or what we call unwrapping.
“If people trust or are comfortable just exchanging crypto for crypto in the P2P environment, then there is nothing that can stop it. And that’s what happened after CBN banned cryptocurrencies and most trading went P2P. P2P is person to person, there is nothing that can happen to that.
“So what happens is you send people funds to their local accounts when you trade what you need to trade on the digital platform. It is expected because it is decentralized and disruptive enough to allow such things to happen.”
Chuta added that the recent drop in BTC prices and the crypto market was creating an opportunity for traders to make a profit.
The Chairman of the Nigerian Blockchain Technology Association Stakeholders and Secretary General of the Nigerian Blockchain Industry Coordinating Committee, Senator Ihenyen, had told our correspondent in an earlier interview that it was time for CBN to reconsider its stance. about cryptocurrencies.
He had said, “Yes, I strongly believe that it is time for CBN to reconsider its stance on cryptocurrencies in Nigeria. There is no doubt that the CBN must have had compelling reasons to shut down the cryptocurrency in the country’s banking and financial system in February 2021.
“But 15 months later, all stakeholders, including the CBN, must have benefited from seeing the real facts and figures of cryptocurrency adoption, as well as the risks and opportunities. Today we know that less than 1 percent of cryptocurrency transactions are linked to illicit transactions.
“Today we know that our law enforcement agencies need more transparency to aid their investigations, not the money blackout in space. Today we know that cryptocurrency exchanges like Binance, Luno, Bundle and the rest of them are the centralized gateway to the world of cryptocurrencies that must accommodate as allied partners of CBN and other regulators.”
He added that the nation was safer with regulated crypto than it resisted, as innovators believe it is the future of finance.
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