The Chief Executive Officer of a prominent cryptocurrency platform in Nigeria, NoOnes, Ray Youssef, disclosed that peer-to-peer transactions, commonly referred to as P2P, represent a substantial business worth around $500 billion within Nigeria alone.
Youssef made these remarks during an interview with Techpoint Africa amidst discussions about a potential ban on cryptocurrency in the country.
Emphasizing the significant P2P transactions, the NoOnes leader highlighted that the actual volume of cryptocurrency transactions in Nigeria far exceeds the reported $59 billion annually, which only accounts for centralized exchanges.
Youssef pointed out that a considerable portion of P2P transactions occur outside traditional platforms like Binance, taking place on platforms such as WhatsApp, Telegram, coffee shops, and various locations on the streets.
He suggested that the reported $60 billion volume on centralized exchanges likely conceals a substantial amount of peer-to-peer transactions, as Nigerians demonstrate resourcefulness in utilizing various channels for cryptocurrency transactions.
In February 2021, the Central Bank of Nigeria issued a directive to financial institutions to close accounts linked to cryptocurrency transactions, but President Bola Tinubu’s administration later reversed this decision, allowing banks and OFIs to offer cryptocurrency services under specific guidelines.
Following the ban, the Central Bank discovered that crypto traders were using peer-to-peer trading to manipulate the naira through pump-and-dump schemes, leading to concerns about the impact on the local currency.
By February 2024, the Central Bank Governor reported that $26 billion in untraceable transactions had been processed by Binance, prompting a crackdown on the exchange and the freezing of numerous bank accounts involved in peer-to-peer transactions.
Despite the government’s actions, many Nigerians, particularly P2P traders, have voiced their discontent, arguing that cryptocurrency should be considered legal and not blamed for the naira’s depreciation.
One user, Kalu Aja, expressed concerns about the state of the Nigerian economy, highlighting the policymakers’ warnings and the need for unity rather than division in addressing the economic challenges faced by the country.
He asserted that the economy has been experiencing a contraction for eight consecutive months, primarily due to factors such as exchange rate pressures, increasing input prices, security challenges, and other related issues. Additionally, he highlighted that the Composite Purchasing Managers’ Index witnessed a significant decline, dropping from 48.5 index points in the previous month to 39.2 index points in February 2024.
Furthermore, he emphasized that both food and core inflation rose in February 2024, leading to an acceleration in headline inflation to 31.70 percent from 29.90 percent in the previous month. This persistent increase in inflation can be attributed to high production costs, ongoing security challenges, and exchange rate pressures.
The individual quoted statements from the Central Bank of Nigeria (CBN) and questioned whether the current environment is conducive to attracting foreign direct investment (FDI). They also expressed concerns about Nigerian companies not investing or purchasing within the country.
Another user criticized the CBN’s stance on cryptocurrency, suggesting that instead of opposing it, the bank should focus on leveraging the system to their advantage and regulating it for beneficial use.
The user further questioned why the CBN is not concentrating on economic policies that are effective and suggested seeking guidance from experienced individuals like Peter Obi. The text also mentioned that several Nigerian fintech startups, including Moniepoint, Paga, and Palmpay, have threatened to block customer accounts involved in cryptocurrency transactions and report them to law enforcement agencies.
This action comes after the National Security Adviser classified crypto trading as a national security concern, indicating that new regulations banning peer-to-peer cryptocurrency trading are being developed.
