Peer-to-peer (P2P) Bitcoin (BTC) volume in Nigeria continues to rise as Africa’s largest economy remains one bastion for crypto adoption. According to Quartz Africa, data from the Bitcoin P2P marketplace Paxful shows that the country ranks second in trading volume after the United States.
As of 2015, Nigerians have traded more than 60,200 BTC on the Paxful platform, which equates to approximately $ 566 million in volume over the period. Data from Coin Dance shows trading activity for the week ended December 12 at 886.3 million naira (approximately $ 2.3 million).
Bitcoin’s growing appeal among Nigerians is likely due to a confluence of factors, the most important of which is the Central Bank of Nigeria’s (CBN) stringent forex policy, as well as the rapid decline in the country’s fiat currency – the naira. In a communique issued on Dec. 16, the CBN ordered international money transfer operators (IMTOs) to stop processing diaspora remittances in naira.
According to the central bank, the move is in line with the new policy of allowing Nigerians to receive international payments into their home accounts. The central bank too issued a notice stating that two IMTOs – TransferWise and Azimo were not authorized to operate in the country.
While the CBN may be reversing some of its tougher forex micromanagement policies, the scarcity resulting from these earlier banking laws appears to have pushed more Nigerians into alternative currencies. Bitcoin adoption tends to rise in countries facing rising inflation and declining confidence in the national fiat currency.
With an average age of 18 years, Bitcoin likely offers an alternative for the tech-savvy young population against the mainstream banking and financial architecture under government control. During the October protests against police brutality, when the government ordered banks to freeze the accounts of the movement’s backers, protesters switched seamlessly to BTC and crypto donations.
According to data from Google Trends, Nigeria is still number one in terms of global Bitcoin search interest. However, the regulatory clarity for the crypto and blockchain space has yet to materialize in the country.
In September, the Nigerian Securities and Exchange Commission (SEC) announced plans to create a regulatory framework for cryptocurrencies in the country. At the time, the Commission stated that this would happen Regulating crypto assets as securities unless proven otherwise.