The recent boom in cryptocurrency usage has led to increased person-to-person trading in Nigeria. This trend follows the sharp decline in the value of the country’s currency, the Naira. Consequently, individuals are turning to alternative means of exchange, bypassing traditional financial systems. Moreover, as trust in centralized institutions wanes, decentralized forms of currency gain traction. This shift highlights the adaptability of Nigerians to economic challenges, fostering resilience and innovation. But to prevent further damage to the native currency, the Nigerian government has outright banned P2P cryptocurrency trading.
P2P Crypto Trade Arrests in Nigeria
Peer-to-peer networks allow Bitcoin investors to trade with each other directly, eliminating the need for a middleman. In these transactions, dealers negotiate the price.
Director General Emomotimi Agama of the Securities and Exchange Commission mentioned during a meeting with fintech professionals on Monday that new regulations are forthcoming. He stated that these rules will govern cryptocurrency exchanges and digital asset custodians. Agama noted that the unveiling of these regulations is imminent, “in the coming days.” Agama discussed the development by saying:
“The thing that needs to be done is delisting the naira from the P2P space in order to avoid the level of manipulation that is currently happening. Recent concerns regarding crypto P2P traders and their perceived impact on the exchange rate of the naira has underscored the need for collective action”.
This warning came soon after Nigeria’s recent ban on Binance Holdings and the arrest of its two executives when they visited the country in February. Tigran Gambaryan, the other person, has been held at the Kuje Correctional Centre in Abuja, while one person managed to escape. This month, he will be on trial for alleged money laundering, currency speculating, and tax evasion crimes.
“Any actions that compromise our national interest, including manipulations, would not be tolerated,” Agama declared.
Is Crypto A Threat To The Naira?
Citizens of the most populous country in Africa are increasingly using cryptocurrency assets as a hedge against the Naira’s decline in value. The Naira’s value has decreased by 65% compared to the dollar since the government loosened currency restrictions in June in an effort to attract foreign investors to the country.
Authorities blocked Binance in February after Central Bank Governor Olayemi Cardoso accused the company of enabling illegal naira transactions on its platform. Agama stated:
“SEC will not hesitate to utilize all the powers within its mandate to handle issues that are negative and pose a threat to national interest. We ask that those involved in sharp practices that undermine national interest should cease and desist.”
