The Nigerian interest in cryptocurrencies keeps increasing as July saw Bitcoin P2P transactions settle at approximately $39 million. This represents a 3% growth from last month’s transaction volume of $37.95 million.
In Nigeria, due to its foreign exchange crisis, many businesses and individuals turn to cryptocurrencies to help process payments faster than its already challenged traditional financial institutions. In the country, Bitcoin is used regularly, not necessarily as a form of asset class meant for long-term holding but as a means to carry out international currency transfers and Nigeria is leading the way in Africa.
In February 2021, the CBN banned financial institutions from honouring cryptocurrency-related transactions and services with immediate effect. The CBN has claimed that the decision was to protect Nigerian investors from the “volatility” and “Insecurity” of cryptocurrencies but many speculate that it was an attempt to stop the funding of certain groups which are hostile to it.
With Nigeria’s P2P volume at approximately $39 million in Bitcoin for July, which is up 3.00% from last month’s level of transaction of $37.95 million, it confirms that despite the ban on cryptocurrencies, the CBN’s decision has not stopped the use of Bitcoin and other cryptocurrencies in the country. This is possible because there are online platforms that are outside the control of the CBN and the Nigerian Government which are being used to trade Bitcoin in Nigeria.
This information does not give a full picture of the level of transactions recorded in the month of July as it only combines the transaction volume of 2 exchanges; Paxful and LocalBitcoins. Other popular exchanges like Binance and Remitano are not included.
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This brings the total estimated volume of P2P Bitcoin transactions so far for the year to approximately $244.82 million.
What to expect
With Bitcoin trading above the $40,000 trading zone, the fear and greed index currently neutral and the recent banning of the sale of forex to BDC’s, the level of Bitcoin transaction is expected to go even higher in August.
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Even with an outright ban on cryptocurrency-related transactions for financial institutions within the country, it has not stopped Nigeria from being the leading pioneer for cryptocurrency-related transactions on the continent. Cryptocurrency traders have now moved to P2P (Peer-to-Peer) trading, which is the first method of trading cryptocurrencies for cash.
Although the government intends to launch its own CBDC (Central Bank Digital Currency) called the e-Naira by October, this may have little effect in deterring Nigerians from using cryptocurrencies as the ease and convenience is second to none.
Bitcoin is trading $41,300, down 0.10% for the day, as of the time of writing this report.