Cryptocurrency Peer-to-Peer Trading Valued at $500 Billion in Nigeria

NoOnes, a prominent cryptocurrency platform in Nigeria, led by CEO Ray Youssef, has indicated that the peer-to-peer (P2P) market in the nation might represent a staggering $500 billion industry.

During an interview with Techpoint Africa, prompted by looming regulations impacting cryptocurrencies, Youssef mentioned the significance of P2P transactions, saying, “Nigeria’s P2P market could very well be worth up to half a trillion dollars. The reality is, the official figures show about $59 billion per annum circulating through centralized exchanges — those numbers being traceable on the blockchain. That sum is probably a vanishingly small fraction compared to the true scope of transactions which amount to perhaps tenfold, dominantly occuring in P2P dealings.”

He added that these P2P exchanges are not limited to formal platforms like Binance, but instead proliferate across social platforms and local gathering spots including WhatsApp, Telegram, and neighborhood coffee shops.

Youssef elucidated, “P2P trading doesn’t just occur on formal venues; it’s happening all around us — in informal chats and hand-to-hand on the streets. And, a sizeable portion of what’s reported by centralized exchanges might actually be camouflaging P2P transactions, considering the adaptability and innovation of Nigerian users.”

In early 2021, the Central Bank of Nigeria ordered financial institutions to shut down accounts associated with cryptocurrency trading. This directive was eventually overturned under President Bola Tinubu’s administration, which now permits banks to engage with cryptocurrencies within specific regulatory guidelines.

Following the ban lift, the Central Bank of Nigeria discovered manipulation of the Naira currency via P2P trading utilizing a pump-and-dump strategy. This led to intensified scrutiny on platforms like Binance, culminating in $26 billion of untraceable transactions and subsequent freezing of bank accounts linked to P2P crypto trades.

Many Nigerians, particularly those involved in P2P trading, are voicing frustration over these government actions, insisting on the legitimacy of cryptocurrencies and defending them against assumptions of causing the Naira’s devaluation.

Various social media commentators have expressed alarm over the current economic trajectory, pointing to consistent economic contraction, surging inflation, and other challenges. These issues, in their view, far overshadow the perceived problems presented by cryptocurrencies.

With sentiments like ‘Abuja, we have a problem’ and calls for the central bank to refine economic policies rather than scapegoating cryptocurrencies, critics highlight the need for a sound approach aligning with global financial trends.

Accusations that crypto trading undermines national security have prompted Nigerian fintech startups such as Moniepoint, Paga, and Palmpay to threaten action against customers engaged in such activities, with regulatory changes anticipated imminently.

The conversation continues around how best to integrate cryptocurrency within Nigeria’s financial regulations without stifling innovation or unduly penalizing its traders.