In spite of the Nigerian government rules limiting crypto trades within financial institutions in a bid to protect citizens and monitor the technology’s growth, Nigerians still engage in crypto trading despite the weakening naira as shown in the undergrowth market.
On a bi-annual basis, Nigeria’s peer-to-peer transactions increased by 25%. Nigeria now has $219 million in P2P volumes on two major P2P platforms (Paxful and Localbitcoins), followed by Kenya with $92 million and Ghana with $69 million.
According to paxful, Each day in 2021, Nigeria recorded over 16000 deals across the country. The increasing use of digital asset trading across the country is due to many factors and one of the factors includes the citizens safeguarding themselves from the sharp depreciation of the local currency as we all know that naira is not stable.
According to Chainalysis Research, many inhabitants in emerging economies such as Nigeria use cryptocurrencies “to protect their funds against currency depreciation, send and receive remittances, and conduct business transactions.”
The Nigerian Securities and Exchange Commission recently released guidelines on the issuance and custody of digital/virtual assets such as Bitcoins and non-fungible tokens (NFTs) in the country, reportedly in response to an increase in trading activity. But despite CBN’s intervention, the naira has continued to weaken with the parallel market finishing last week at N610 per dollar thereby pushing many young Nigerians to rely on Bitcoin and other crypto assets like stablecoin amid the ongoing bearish trend.
Citizens also use the flagship crypto for remittance services, in which they exchange bitcoin or other cryptocurrencies for Naira over-the-counter (OTC). For instance, a Nigerian over-the-counter (OTC) trader could offer to buy Bitcoin or other crypto currency from another Nigerian and pay in naira. Millions of Nairas are exchanged daily for OTC trades, thereby providing dealers with a steady source of money.
According to statista, Nigeria is one of the highly populated African country and also the highest cryptocurrency adopters.
According to trends on Google, Nigeria had the third highest number of searches about Bitcoin in the world as at the time of writing, thus indicating the cryptocurrency’s expanding utility in Africa’s largest economy.