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Bitcoin Peer-to-Peer Trading Up 27% in Nigeria Since Crypto Ban

In brief P2P trading volumes are surging in Nigeria, three months after a ban on financial institutions trading with crypto companies. Analysts point at worsening economic conditions, and the necessity of alternatives to the traditional financial system.

Three months after Nigeria’s central bank restricted financial institutions from dealing with anything crypto-related, peer-to-peer (P2P) Bitcoin trading in the country is having a heyday. 

According to analytics platform UsefulTulips, Bitcoin P2P trading in Nigeria has surged by 27% since restrictions were introduced by the country's central bank (CBN).

90-day trading volumes in sub-Saharan Africa compared. Image: UsefulTulips.

"The CBN requested that banks and other financial institutions close the accounts of cryptocurrency exchanges in the country,” a spokesperson for Paxful, a leading P2P exchange in Nigeria, told Decrypt. However, as individuals are not banned from using cryptocurrencies, “peer-to-peer platforms like Paxful are not affected by the action," she added, noting that "as a result, all peer-to-peer services are seeing growth." 

Nigeria is Paxful’s biggest market and the largest P2P market in sub-Saharan Africa. While P2P trading in Ghana and Kenya is also on the rise, almost $103 million was traded in Nigeria in the past 90 day period on P2P exchanges Paxful and LocalBitcoins—up from $80.6 million three months before. 

The enthusiasm with which the country’s youth have taken to crypto means that Nigeria is often called Africa’s Bitcoin Nation; its trading volumes made records prior to the controversial ban.

The price of Bitcoin has rallied by almost 500% since the start of its latest bull run at the end of 2020, hitting record highs of almost $65,000 this month before a pullback to $54,000.  

And while Africa’s overall trading crypto volumes are tiny, a mere two percent of global volumes, the emergence of Bitcoin and other cryptocurrencies crea...

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