Earlier last week, the Central Bank of Nigeria (CBN) had announced shutting down bank accounts of customers who buy, sell, or trade cryptocurrencies. This comes as a surprise considering Nigeria has the second-largest Bitcoin trading volume in the world. Crypto communities in Nigeria have now revealed on continuing to use cryptocurrencies amid the ban by flocking to P2P exchanges.
Nigerians to Continue Using Cryptocurrencies in Undetectable Ways
The Crypto community in Nigeria has stated on continuing to use cryptocurrencies in an undetectable way by not using centralized exchanges. For example, by using peer-to-peer transactions, two users can directly connect to each other to trade cryptocurrency. Platforms such as Paxful and Binance helps conduct peer-to-peer transactions.
Nigeria is leading in Africa in trading volumes on peer-to-peer crypto exchanges such as Paxful and LocalBitcoins. Meanwhile, in the second quarter of 2020, Nigeria’s P2P Bitcoin trading weekly volumes doubled from $8 million to $16 million. Over the past five years, data analyzed on Quartz Africa in December revealed that Nigerians traded over 60,215 Bitcoin, then worth more than $566 million.
Nigeria has become a popular country to use cryptocurrency as an alternative to its fiat currency, a national currency prone to depreciation. For instance, during protests against police corruption in the country last October, the non-profit Feminist Coalition accepted crypto donations for the protests in response to the non-profit’s bank accounts being frozen.
Nigeria’s Central Bank Believes Crypto Investments Risky
Nigeria’s central bank provided no explanation on imposing the crypto ban, apart from highlighting the risks associated with cryptocurrency transactions. The bank apparently ordered financial institutions to close accounts associated with cryptocurrencies to curb criminal activity and risky investments.
Responding to this, Bundle bundle crypto exchange released a statement to its customers about moving to alternative channels to ensure their customers can still buy and sell cryptocurrency. The exchange assured that more information will be provided on how this will work in the coming days.