Nigeria is one of the largest crypto markets with about 50% of the overall Bitcoin trading volume in West Africa. This is not surprising especially in a country with a devalued currency and strict regulations surrounding the crypto industry. Following the Central bank’s ban on cryptocurrency, a local report claims that about $100 million of Bitcoin is traded weekly on social media.
In February, the central bank issued a directive that banned financial institutions in the country from providing their services for all crypto-related transactions in the country. Following the ban, Nigerians turned to P2P networks and other similar channels to maneuver through the ban.
A local news outlet has now reported that Bitcoin activities have increased despite the ban. The report revealed that crypto traders and investors are now switching to simpler channels to trade the leading crypto asset. Based on the outlet, more than $100 million worth of Bitcoin is traded on apps like WeChat and Telegram monthly.
Although the ban has hurt several crypto startups and exchanges, it seems to have driven wider adoption of Bitcoin in the country. Initially, the CBN’s directive was thought to be a blanket ban, but a senior CBN executive recently said that it exempts crypto trading. Nevertheless, Nigerians have turned away from larger exchanges to other simpler alternatives.
Nigerians Turn to Social Media Platforms to Trade Bitcoin
One of the three major substitutes opted for are platforms like Luno, which records about $6 million transactions daily. The other notable alternative are P2P networks powered by leading crypto exchanges like Binance, Paxful with more than $18 million weekly transactions.
The most overlooked one, although informal, makes up a larger percentage of the overall trading volume in Nigeria. The transactions happen on social media platforms like Instagram, WhatsApp, Telegram etc.and involve either group trading or individual chats.
Although these methods are insecure and inefficient, they make up the bulk of crypto trading in Nigeria. Large Businesses are going through the stress of connecting with multiple vendors.