Why Bitcoin is soaring in Nigeria after it was banned

Nigeria, with a population of more than 200 million, is home to one of the largest Bitcoin user communities in the world within its borders. The widespread use of cryptocurrency by the citizens of sub-Saharan Africa was frowned upon by the Nigerian central bank, which banned financial institutions from any type of exchange three months ago.

Nigeria views bitcoin and other cryptos as a threat to its economic integrity, which is why it has banned their use through exchanges

This meant that the banks had to legally close the accounts of all customers who sent (or received) money on an exchange, which means the backbone of cryptocurrency trading. However, this has had unexpected effects as Bitcoin P2P (peer-to-peer or person-to-person) transactions have increased by 27% since the ban.

Technically speaking, it is not forbidden to have cryptocurrencies in Nigeria, but rather to work with exchanges. Central bank analysts suspected that a ban on stock market trading would wipe out the crypto economy in Nigeria in one fell swoop, but Nigerians are determined to continue using cryptocurrencies.

This allows users of platforms like Paxful, a P2P crypto exchange service, to continue trading with one another without any legal implications. Indeed, the last three months of crypto trading volume was $ 103 millionThis shows a significant increase from $ 80 million in the three months leading up to the ban.

Nigeria is known as the “crypto nation” of AfricaIn this region of the world, Bitcoin and other cryptocurrencies have a much stronger influence than in the rest of the world. The World Bank estimates that an estimated 20 million Nigerians, who make up 20% of the population, are at risk of poverty in 2022 due to the economic crisis caused by COVID. Hence, it is not surprising that Nigerian citizens are looking for alternative funding routes that cryptocurrencies offer.

Nigeria isn’t the only country whose government is suspicious of Bitcoin. The international scene is quite divided when it comes to cryptocurrencies because just like countries like Nigeria are pursuing this sector, there are countries like Iran that openly support the use of crypto.

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