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Data reveals a 16% increase in Nigeria’s P2P Bitcoin trades following its crypto ban

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Nigeria’s central bank barred crypto transactions in Nigeria’s financial sector no more than a year ago. Even if the central bank has been battling against crypto transactions in its financial ecosystem, crypto transactions are increasing in Africa’s biggest crypto market.

Nigeria’s peer-to-peer transactions climbed by 16 percent on an annual basis, as per the reports by coindance. Nigeria’s P2P volumes on two major P2P platforms (Paxful and Localbitcoins) currently stand at $400 million, Kenya with more than $160 million and South Africa with $117 million.

coin dance localbitcoins NGN volume
Weekly LocalBitcoins Volume by Coindance

While many would expect that the restriction would limit the growth of crypto trading in the country, the number of P2P transactions has been stealthily on the rise. P2P systems allow buyers and sellers to sell with one other, eliminating any central platform directly. It is widely utilized in nations where crypto trading isn’t authorized.

The population of Nigeria and other African nations are particularly eager about crypto, as evidenced by the high adoption rate.

Nigerian government deviates to CBDC

After recognizing that the crypto prohibition did not deter residents from carrying out transactions, the Nigerian government announced its e-Naira central bank digital currency (CBDC) program in late October last year.

This makes the African country one of the earliest governments to accept a national digital currency. The e-Naira wallet saw over 500,000 within the first three weeks of its inception, and since then, the authorities have reported that the transaction volume on the program has been outstanding.

eNaira is a digital currency issued by the Central Bank of Nigeria. eNaira serves as both an instrument of exchange and a store of value, giving improved payment prospects in retail transactions compared to cash payments.

Are the governments headed in the wrong direction?

The latter succeeds if you compare the ratio of countries that side with crypto and those against it. Even though some countries like El Salvador accepted crypto as mainstream, some countries are still skeptical. Many countries are worried that cryptocurrencies will affect their financial stability. It’s high time that the higher officials in every country educate themselves about blockchain and crypto and how they can change and develop a country.

Here’s why Binance froze the accounts of 281 crypto users from Nigeria

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Nigeria, which has the highest rates of cryptocurrency ownership in the world has continued to grow despite the government ban. A majority of them have their portfolio registered in the world’s biggest crypto exchange Binance which has increasingly come under the prying eyes of regulators around the world.

As per a recent development, the trading platform announced that it restricted crypto accounts of registered Nigerian users in order to comply with anti-money laundering regulations and ensure the security of the platform for traders. In a statement published on its website, the crypto exchange stated,

“Protection mechanisms such as know your customer, anti-money laundering measures, collaboration with law enforcement, and account restrictions are in place to ensure our community remains protected.”

Drilling deeper as per the official announcement some 281 odd Nigerian accounts have been affected by this clampdown, with roughly 38% of these cases restricted at the request of international law enforcement, it said.

Following that many of its citizens trading on the Binance platform complained recently of the inability to initiate or complete transactions. This isn’t the first time where users dealing with digital assets have suffered account restrictions.

Nigeria crypto users- highest in Africa

Previously crypto users from the West African nation have faced trouble trading crypto assets since the Central Bank of Nigeria last year asked its financial institutions not to carry out any transaction business with cryptocurrency exchanges and ordered its digital currency traders to shut down accounts.

Nonetheless, Nigerians continue to use digital currencies as a hedge against inflation and naira depreciation, as well as to remit money. In fact, citizens in the African country hold the world’s highest proportion of such assets per capita, as per a survey conducted by German-based consumer data provider Statista. 

With respect to the recent deactivation of Nigerian crypto accounts, Binance has so far resolved 79 of the account restriction cases and is in the process of formulating a plan to deploy more customer service personnel and expert risk agents to quicken the resolution process, the notice read.

In addition to that, it assured its customers that all non-law enforcement-related cases will be resolved within two weeks’ time. 

Nigeria set to launch CBDC on 25th October

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In a report presented by Bloomberg, the government of Nigeria has decided to launch its CBDC on 25th October Monday. The CBDC, dubbed as eNaria, is not there to replace the physical currency of Nigeria but is there to compliment it.

According to the report, the eNaira will “make financial transactions easier and seamless for every strata of the society.” This means that the goal is not to defeat the existing currency system but rather to integrate the digital currency into the existing system.

Nigeria will be one of the pioneering countries to actually integrate CBDC in the financial structure of the nation. The launch of eNaira was expected to take place on the 61st independence day of the nation, between 1st and 4th October. However, the launched was delayed.

Nigeria Central Bank (CBN) to release wallet too

In their statement, the country’s regulatory authority said that with the eNaira, the bank would also release a wallet that can be integrated into the individual bank account of a person. This will make the transfers of funds way easier and trustworthy for the people.

The wallet sanctioned by the CBN can also be used through the prepay option, making the payment structure way easier for a person, allowing them to pay as they go. It seems that the government has planned to release the three-tier consumer “speed wallet” for both the unbanked and the banked.

For the people with no bank accounts, the limit for each transaction will be set at ₦50,000 ($100) while they can own ₦300,000 ($600) altogether in the wallet. However, the customers with bank accounts will have the privilege of owning higher amounts in the bank, and transfer limits will be set higher.

The Central Bank of Nigeria has formed an alliance with Fintech company Bitt Inc., as the Technical Partner, enabling the firm to use its technical prowess for better integration of the eNaira.

Nigeria to kick start its CBDC pilot in October

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As the world takes on the digitalization wave, Nigeria revealed that it was getting on the journey.

Central bank digital currency [CBDC] rose to fame after China took a plunge into developing a digital version of its fiat currency. While China is way ahead in the game, several other governments have started to catch up. The Chinese government has moved past its research and development phase and has already kick-started its distribution stage. Alerted by this rapid development, other countries have begun developing their own digital assets.

Nigeria hoped on to the bandwagon and even went on to announce the launch of its forthcoming CBDC pilot scheme.

Nigeria takes a leap into digitalization

In a recent webinar, the Central Bank of Nigeria [CBN] pointed out that it would roll out the pilot program for the region’s CBDC project, ‘”GIANT,” on 1 October 2021.

The project was reportedly in the works since 2017 and operated on an open-source blockchain called Hyperledger Fabric. This project has been focusing on the development of blockchain-based solutions, applications as well as products.

Rakiya Mohammed, the information technology director for the Nigerian central bank that Nigeria took this plunge into the CBDC game as 80 percent of central banks across the globe were on the verge of launching or developing a CBDC. Nigeria did not want to lag or be left behind in this move towards digitalization, the bank noted.

In addition to this, the central bank hopes to garner macro-management as well as growth. Easing the process of cross-bored trading is also an added advantage.

While the country continues to embrace the CBDC side, recent comments from the government about cryptocurrencies have led to people thinking that it is anti-crypto. Despite this, crypto is being widely used across several industries in the region. Most recently a school in the country revealed that it would accept crypto for tuition fees.

Nigerian school embraces crypto while regulatory clarity remains hazy

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A prominent Nigerian school in the city of Kano revealed that would accept fees in cryptocurrency.

Several countries across the globe have started to embrace cryptocurrencies, particularly after the most recent crypto rally. The latest slump in the crypto market did not diminish the demand for these assets as platforms throughout several industries have been onboarding crypto into their systems. Despite the growth of the crypto-verse, the regulations surrounding it still remain unclear, and Nigerians have been a victim of the same.

Keeping all this aside, Kano’s New Oxford Science Academy was all set to include crypto into its fee structure.

Nigerian crypto-friendly school

As per a news portal, the New Oxford Science Academy would be accepting tuition fees in cryptocurrency. Elaborating on the same, the school principal, Sabi’u Musa Haruna, reportedly made the arrangement only after reviewing it with the parents. Elaborating on the adoption and popularity of crypto, the principal added,

“We’ve decided to accept cryptocurrency as school fees because the world today is tilting towards the system. We believe one-day digital money will gain more acceptance than paper money.”

Furthermore, the principal did not reveal what cryptocurrencies the school had started to accept. Nevertheless, with Bitcoin being highly popular in the country, it is speculated that the Nigerian school could be accepting BTC for fees.

Additionally, Haruna pointed out the progress that other countries like El Salvador and Tanzania were making in terms of crypto adoption.

The crypto scene in Nigeria has been quite uncertain, specifically after the Central Bank of Nigeria declared that it had banned financial institutions from aiding services to cryptocurrency platforms. However, while this took place in February 2021, the country’s vice president, Yemi Osinbajo, delivered a crypto-positive speech in May. He stated,

“There is no question that blockchain technology generally, and cryptocurrencies, in particular, will in the coming years, challenge traditional banking, including reserve banking, in ways that we cannot yet imagine. We need to be prepared for that seismic shift, and it may come sooner than later.”

Nigeria’s Popular Hotel Makes Room For Bitcoin [BTC]

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While some countries, like Turkey, are enacting laws to curb the use of Bitcoin [BTC] for payment, others, like Nigeria,  seem to be embracing the king coin.

Bitcoin has undoubtedly gone places over the last couple of months. The cryptocurrencies landed a spot in an array of prominent platforms across the globe. From Miami’s nightclub to Nigeria’s luxury hotel, Bitcoin is undoubtedly on a roll while its price figures out the road to recovery from its recent downfall.

Nigeria’s luxury hotel, George Residence had jumped onto the Bitcoin bandwagon by accepting the king coin for payments.

Nigeria Continues To Embrace BTC

As per a local news portal, the CEO of George Residence, Yanju George had announced its support for BTC by accepting it as payment. This would reportedly make the hotel the first in the country that accepts Bitcoin. The hotel in Lagos, Nigeria is all set to receive payments in BTC starting this weekend.

Furthermore, Africa’s prominent crypto brokerage platform, Coinvest Africa would aid the hotel in accepting BTC payments.

The inflation issue in Nigeria is no news to anyone. Keeping in mind the country’s inflation rate, the CEO of George Residence revealed that the hotel intended to support BTC and make the cryptocurrency its “primary reserve asset” in order to hedge against the fiat inflation in the region. Elaborating on the same, George added,

‘‘We have allocated around 50% of our cash reserves to Bitcoin…We hope to increase that as time goes on. Bitcoin is the currency of the future and it is only right that we are strongly positioned so we do not get left behind.”

While BTC is currently priced at $54,566, the CEO pointed out that the hotel expects to provide the guests a “faster and more secure way to enjoy” the comfort that George Residence grants.

Even though rumors pertaining to the ban of crypto in the country had surfaced in the past, the governor of the Central Bank of Nigeria [CBN] affirmed that the country would embrace crypto as Nigerians had to be prepared for the “seismic shift, and it may come sooner than later.”

Nigeria’s VP Delivers Crypto Positive Speech Amidst Rumors Of A Ban

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Nigeria seems to be rendering a positive notion towards the cryptocurrency industry, amidst the current bull run. While the governor of the Central Bank of Nigeria [CBN], recently classified cryptocurrencies as illegitimate, the latest news came as a ray of hope for crypto lovers of the country.

The cryptocurrency industry had to fight hard to shun off its association with the dark web. Despite, the noteworthy growth of Bitcoin and the altcoins, the higher-ups from several countries continued to diss the digital asset industry. However, individuals across the globe have become more accepting of Bitcoin as well as other currencies. Nigeria’s vice president, Yemi Osinbajo is substantial proof of the same.

Nigeria’s VP Believes Crypto Could Challenge Current Financial System

Speaking at the Bankers’ Committee Economic Summit that took place on Friday, the vice president pointed out that there was no doubt about the potentials the blockchain and the crypto industry would entail in the future. Similar to other nations, Nigeria was seen preparing for the inevitable change that the world would be coming across in terms of digitalization. He added,

“There is no question that blockchain technology generally, and cryptocurrencies, in particular, will in the coming years, challenge traditional banking, including reserve banking, in ways that we cannot yet imagine. We need to be prepared for that seismic shift, and it may come sooner than later.”

Osinbajo seemed to be serious about inducing crypto into the country as he elaborated on the regulatory part of the industry.

Every exciting development would require “prudence and care” especially during the adoption stage, he suggested. The vice president further stressed the fact that the government was required to act with knowledge as opposed to fear.

The vice president further said,

“We must ensure that we are in a position to benefit and in a position to prevent any of the adverse side effects, or any of the possible, even criminal, acts that may arise in consequence of adopting or taking any of these options.”

Furthermore, Osinbajo addressed the decentralized finance aka DeFi wing as well. Speaking about the same he suggested that the services that DeFi offers could challenge traditional finance.

Nigeria Takes A U-Turn By Ceasing Banks From Rendering Services To Crypto Platforms

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The cryptocurrency industry is currently valued at a high of $1.18 trillion. While governments have been steering towards the industry, Nigeria seems to be moving away. The country had previously recorded increased crypto activity, which led to several platforms venturing into its markets. But, the latest decision by the Nigerian government wasn’t very favorable for the crypto-verse.

Nigeria’s Latest Move Causes Unrest In The Crypto-Verse

In a recent letter, the Central Bank of Nigeria revealed that all the financial institutions like banks in the country were to close all the accounts that had a history in carrying out cryptocurrency transactions, at the earliest. The letter read,

“Accordingly, all DMBs, NBFIs, and OFIs are directed to identify persons and/or entities transacting in or operating cryptocurrency [sic] exchanges within their systems and ensure that such accounts are closed immediately. Please note that breaches of this directive will attract severe regulatory sanctions.”

Nigeria
Nigeria Takes A U-Turn By Ceasing Banks From Rendering Services To Crypto Platforms 3

While Binance recently rolled out a platform exclusively for the citizens of Nigerians, the exchange decided to reciprocate to the latest news by suspending Nigerian naira [NGN] deposits. In a recent blog post, Binance announced that all the deposit services of NGC payment partners on the exchange would be temporarily suspended starting from 5 February 2021. Binance revealed that it was looking into the matter and would lift this temporary suspension as soon as it receives clarity on the matter.

Changpeng Zhao aka CZ, the CEO of Binance also commented on the same. He tweeted,

“Received notice from our channel partners that NGN deposits and withdrawals will be affected. Still confirming details on when/how. Please withdraw your NGN as early as possible to avoid potential channel issues. Will share more details as they become available.”

Just when the entire crypto market was seen on a rise, Nigeria’s latest restriction could curb the benefits that its citizens could bag.

Nigeria To Formulate New Framework For Crypto; Binance Nigeria Goes Live

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As COVID-19 restrained the movement of mankind. The world realized the importance of digitalization. Nigeria was taking the whole connotation quite seriously and was seen spearheading the adoption of crypto in the country. The latest news from the African country revealed that it was formulating new laws to stimulate the adoption of crypto.

Nigeria To Spearhead Crypto Adoption

Several governments seemed to have become increasingly accepting of cryptocurrency post the COVID-19 frenzy. Nigeria seems to be jumping on the bandwagon. A Nigerian news portal, Business Day recently published an article revealing that the Securities and Exchange Commission [SEC] of Nigeria had been closely working with the Ministry of Finance. It was further reported that the agency and the Ministry were working together in order to formulate regulations for crypto as well as blockchain.

Several countries across the globe have put into place regulations to keep crypto activities in check. This is in light of the increase in value and the adoption of crypto. The efforts of the Nigerian SEC to regulate crypto in the country go way back. The Nigerian SEC recently categorized cryptocurrencies as securities. Nigeria is Africa’s largest economy, ranking eighth in the Cryptodoption  Index for the year 2019-2020.

While blockchain technology has already worked its charm on governments across the globe, Nigerian officials revealed that they were hoping to generate a whopping $10 billion in revenue by 2030 via new technology.

Binance Steers Into Nigeria

Malta-based cryptocurrency exchange Binance has been making news following the record-breaking volume it’s recording. While the world’s largest exchange has been stepping into almost every country on planet earth, Nigeria was the latest choice of Binance. In a recent tweet, the exchange alerted its users that the “BinanceNigeria” Homepage was live. The tweet read,

Crypto has been a savior to many. While it is time and again proven that economically oppressed countries have been seeking assistance via crypto, Nigeria seems to be walking on the same road. Nigeria has been struggling with violent civil unrest and disease. The increased adoption of crypto in the country is substantial proof that its citizens are driving towards the mass adoption of crypto.

Nigerian SEC Categorizes Crypto Assets As Securities

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Cryptocurrencies appear to have found substantial assistance and shelter in poor and economically oppressed countries, as opposed to developed countries. Venezuela, a country whose economy has collapsed, has made news in the crypto-verse, particularly in view of its wide crypto-acceptance rate. Nigeria appears to be following suit as the country’s regulator has revealed support for digital assets.

Cryptocurrencies Fall Under The Purview Of Nigerian SEC

The Nigerian Securities and Exchange Commission (SEC) shared a declaration entitled ‘Statement on Digital Assets and their Classification and Treatment’ highlighting the status of cryptocurrencies in the country. While it was made clear that the regulatory body had no intention of hindering innovation, the importance of engaging in ethical practices for an effective market was set out in the statement. The SEC has revealed that digital assets would be regulated by keeping in mind the safety, deepening of the market and the production of solutions for quandaries.

While the developers of several cryptocurrencies have tried to prove that cryptocurrencies cannot be classified as securities, the Nigerian SEC has strongly argued that ‘virtual crypto assets are securities, unless otherwise proven.’ However, the Commission has given individuals the opportunity to demonstrate how their assets are not securities. Detailed SEC,

“[…]where the finding of the Commission is that the virtual assets are indeed securities (not structured to be exclusively offered through crowdfunding portals or other exempt methods), then the issuer or sponsor must register the digital assets.”

In addition, the registration process was also mentioned in the declaration where the initial assessment of the evidence followed by ‘filing for proper registration, either directly by the issuer or the sponsor, or where the burden of proof is not satisfied.’

The Commission noted that any platform or person involved in cryptocurrency or blockchain-related activities would fall within the competence of the SEC. This also included Digital Assets Token Offering (DATOs), Initial Coin Offerings (ICOs), Security Token ICOs.

Additionally, as for foreign issuers, the SEC mandated the establishment of a branch office in the country. The statement detailed,

“The Commission may require Foreign or non-residential issuers or sponsors to establish a branch office within Nigeria. However foreign issuers or sponsors will be recognized by the Commission where a reciprocal agreement exists between Nigeria and the country of the foreign issuer or sponsor.”