Regulation
Crypto: Peer-to-peer trading is worth $500 billion in Nigeria
The CEO of one of Nigeria’s leading cryptocurrency platforms, NoOnes, Ray Youssef, has revealed that peer-to-peer, commonly known as P2P, is likely worth $500 billion in revenue alone. in Nigeria.
Youssef said this in an interview with Techpoint Africa following the impending ban on cryptocurrencies in the country.
Speaking on Friday about the astronomical P2P transactions, the NoOnes boss said: “Peer-to-peer is probably a half-a-trillion dollar business in Nigeria alone. It’s the truth. Officially, the volume of cryptocurrencies in Nigeria stands at $59 billion per year, and that is just the official volume of everything happening on centralized exchanges that can be tracked on the blockchain. Yes, let’s say between $59 and $60 billion.
“It’s a joke; the actual volume is ten times that. It’s peer-to-peer, and it’s not just the volume that happened.
Youssef added that most P2P transactions do not take place on Binance or any other platform but on WhatsApp, Telegram, cafes and everywhere on the streets.
“Most peer-to-peer trading doesn’t happen on Binance P2P, NoOnes, or any of these other platforms. This happens on WhatsApp, Telegram, in cafes, everywhere on the streets. This is where most peer-to-peer exchanges take place. And in fact, I would even say 60 billion dollars passing through centralized exchanges. I think most of this is actually peer-to-peer volume that they’re also hiding because Nigerians are very crafty and have ways of using things for things they’re not necessarily intended for to be used,” he argued.
Recall that in February 2021, the Central Bank of Nigeria issued a circular calling on Deposit Money Banks (DMBs), Non-Banking Financial Institutions (NBFIs) and OFIs to close the accounts of persons or entities involved in crypto transactions -currency within their systems.
But President Bola Tinubu’s administration has lifted the ban requiring all banks and OFIs to provide cryptocurrency services with the provisions of the guidelines aimed at regulating the activities of virtual asset service providers.
The consequence of the ban was the discovery by CBN that crypto traders are using peer-to-peer trading to manipulate the naira via a pump and dump strategy.
In February 2024, central bank governor Olayemi Cardoso claimed that $26 billion in untraceable transactions had been processed by Binance.
This led to a crackdown on global exchange Binance and the freezing of more than 1,000 bank accounts involved in peer-to-peer transactions.
However, Nigerians, especially P2P traders, have begun to express their displeasure over the new development from the federal government as many believe that cryptocurrency is legal and should not be considered as a factor behind the weakening of the naira.
One user, Kalu Aja, wrote in a thread on his handle, @FinPlanKaluAja2, “The Nigerian economy is slowing down and becoming insignificant.
“The economy is dying. Policy makers (Central Bank of Nigeria) know this and are already warning precisely.
“The response of the political class is to divide and distract.
“Guys, I’m not an alarmist; the economy is broken, this is not my data or analysis.
He claimed that economic activity has been contracting for eight consecutive months, mainly due to exchange rate pressures, rising input prices, security concerns, etc.
He added that the Composite Purchasing Managers’ Index declined sharply to 39.2 index points in February 2024 from 48.5 index points in the previous month.
He continued: “Food inflation and core inflation increased in February 2024, supporting an acceleration in headline inflation to 31.70 percent in February 2024, from 29.90 percent in the previous month. This continued rise in inflation was mainly due to high production costs, persistent security concerns and exchange rate pressures.
“All quotes from CBN. Is this an environment likely to attract FDI? When do Nigerian companies already in Nigeria not buy or invest?
“Abuja, we have a problem.”
Another user, who tweeted with @trendwithola, said: “So the Central Bank of Nigeria still thinks cryptocurrency is the cause of Naira’s woes?
“The Naira will lag behind 1 USD, 1 GBP, 1 CAD if the right thing is not done.
“@cenbank should stop chasing shadows. You better have good economic policies in place. Don’t just copy and paste. Get a plan from the man we are undermining, Peter Obi, or leave office,” she added.
“Rather than fighting cryptocurrencies, why isn’t the Central Bank of Nigeria working to exploit the system to its advantage? Why not focus on its regulation to make beneficial use of it? After all, you can’t take apart what you haven’t built,” submitted a user with the handle @Themytea2.
Recently, at least three Nigerian fintech startups, including Moniepoint, Paga and Palmpay, threatened to block their customers’ accounts dealing with cryptocurrency and report such transactions to law enforcement officials after the national security advisor has classified cryptocurrency trading as a national security issue.
This designation means that new crypto regulations that will ban peer-to-peer trading of cryptocurrencies are in the works, said Tosin Eniolorunda, CEO of Moniepoint.
There are also growing concerns that a regulation banning p2p exchanges could soon be made public.