It’s almost a week since the cryptocurrency ban in Nigeria. The Federal Government of Nigeria banned cryptocurrency in Nigeria and asked banks and other financial institutions to close accounts associated with cryptocurrency. Even with the ban and restrictions, cryptocurrency continues to thrive in the country. Figures show that Nigeria transacted more Bitcoin than any other country in Africa in the past week. Central Bank of Nigeria’s ban on cryptocurrency has therefore, not stopped Nigerians from using cryptocurrency. Although no transactions involving cryptocurrency can be transacted using banks and other financial institutions, cryptocurrency continues to thrive with peer-to-peer solutions. In fact, Nigeria transacted more Bitcoin this past week, more than any all other African countries put together. The use of Bitcoin for peer-to-peer lending went up by almost 16 percent since the ban took effect almost a week ago.
When the ban was issued, Nigerians expressed their sentiments via social media, expressing how they felt about the ban and how it was going to shut down doors of opportunities. In an interview with Channels TV, former Head of Directorate of the Central Bank of Nigeria and former presidential aspirant; Kingsley Moghalu described the ban on cryptocurrency as an attempt by the Nigerian Government to rob Nigerians off the opportunity of a source of income especially in a time as difficult as this.
Almost a week after, Nigeria led other countries with about $7.35 million in P2P trading on LocalBitcoins and Paxful. Kenya, her closest rival had a transactional value of just $2.86 million during this past week. South Africa took third place with a transactional value of $2.38 million.
Kingsley Moghalu stated that since the past five years, Nigeria has transacted more than half a billion dollars in Bitcoin. He described cryptocurrency as a real factor in the Nigerian investment ecosystem and suggests that the government should explore ways to use it to the country’s advantage instead of outrightly banning it.
Experts say that as banks would stop working with cryptocurrency exchanges, peer-to-peer transactions would be on a high. People are advised to withdraw their local denominated deposits on time so that they do not experience the difficulty of payment the ban would cause.
Central Bank’s ban does not criminalize holding of Bitcoin. It just means that banks and other financial institutions are not allowed to process transactions associated with cryptocurrency. Experts say that the ban simply put, means that banks and financial institutions should put a stop on cryptocurrency transactions until the Central Bank of Nigeria can find a way to regulate them. That being said, a reversal of the ban is not expected soon.
Peer-to-peer transactions have become the biggest solution to this ban on cryptocurrency. Peer-to-peer exchange means that cryptocurrency is exchanged between parties especially individuals and such transaction is devoid of any central authority. Peer-to-peer transactions is therefore, a decentralized method of exchanging cryptocurrency between parties.
Cryptocurrency is here to stay and the rise in peer-to-peer transactions over the past week shows how much trust Nigerians (and people) have in it. Cryptocurrency still remains the cheapest way to transact and irrespective of the ban, people will come up and continue to come up with solutions. Nigerians still continue to invest and use Bitcoin and other cryptocurrencies even with the ban.