Nigeria continues to lead the way in the use of cryptocurrency. Buying Bitcoin with a credit card here will not be difficult, because for the local population the opportunity to exchange cryptocurrency is a lifeline in the current economic conditions.
What are the reasons for such rapid growth?
- Restriction of access to traditional financial services;
- Low value of the national currency;
- Rapid growth of inflation.
As a safety net, locals use exchangers in Nigeria to protect their assets from a volatile economy. Cryptocurrency transactions have been carried out over time not only for transfers and payments, but also for the purpose of speculation. The prevalence of exchanges allows a large number of people to buy Bitcoin instantly and take part in the world's digital transactions.
The ability to buy Bitcoin in Nigeria helps local people improve their financial situation, organize trade, receive fast money transfers and stimulate economic growth. For citizens, the undeniable advantages of cryptocurrency are the ability to securely store, manage and gain access from any geographical location. In many ways, cryptocurrency saved them from bureaucracy and high fees for cross-border transfers.
Bitcoin is by far the most widely used cryptocurrency in Nigeria, followed by Ethereum (ETH), Litecoin (LTC) and others. Ignoring the ban by the Central Bank of Nigeria (CBN), cryptocurrency trading continues and understanding how to buy Bitcoin in Nigeria is available to more and more locals.
Why is the CBN wary of Bitcoin?
The ban on cryptocurrency transactions has only fueled their popularity. According to the regulator, cryptocurrencies have a bad impact on international monetary policy, and their spread will lead to a significant blow to financial institutions and the Nigerian economy. However, there is an assumption that soon it will be more profitable for the country’s leadership to regulate the use of cryptocurrencies than to ban them outright. Bypassing government actions, users continue to make transactions using peer-to-peer networks and the black market. Although this avoids government scrutiny, such actions are quite risky. The introduced ban made the exchange and sale of cryptocurrency more difficult to monitor, but at the same time less secure.
The state of the crypto market in Africa
At the moment, Africa represents one of the fastest growing crypto markets, and rates of adoption of cryptocurrencies in countries such as Nigeria, Kenya, Tanzania and others are very high. P2P transfers, which allow one to make transfers within the region, have gained popularity. One of the reasons is that such platforms provide the ability to instantly change cash and buy Bitcoins in Nigeria. For most residents, this is a way to save money from inflation and other economic shocks. However, there are several reasons why the cryptocurrency market in Africa is slowing down:
1. Insufficient coverage and slow Internet speeds.
2. Low level of financial literacy of the population.
3. Widespread cryptocurrency fraud.
Regulating cryptocurrency exchanges in Nigeria is not so easy now; the authorities have remained neutral towards the crypto market for a long time. The regulators, in turn, warn about the unreliability of investments in digital assets. Different African countries have their own approach to this issue; in some, the use of cryptocurrencies threatens violators with a prison sentence, while in others there is only a ban on banks servicing crypto companies and their transactions. There is still a high risk of blocking accounts in the country that are in one way or another involved in cryptocurrency payments.
Cryptocurrency exchanges in Nigeria have been making payments quite freely for a long time, since there was no cryptocurrency legislation in this country. Since February, commercial banks have been prohibited from conducting transactions with cryptocurrencies, but sales and investments continue to occur within the framework of the law. Nigerians know how to buy cryptocurrency with a credit card, but cannot directly use money from exchanges, so they successfully use P2P platforms.
Convenience of P2P
Selling through P2P platforms allows one to make transactions without intermediaries, ensuring reliability and anonymity. Cryptocurrency exchanges such as Binance or OKX are used for P2P trading. Before starting sales, one must first confirm their identity by sending documents to the exchange, otherwise their account will have a number of restrictions or may be suddenly frozen until verification. In this sense, the exchange acts as a kind of guarantor, holding the cryptocurrency during the exchange process. Called an escrow system, money or another asset is held by a third party until certain conditions are met between the parties to the transaction. However, as in any area where financial transactions occur, scammers can be found in P2P, so one should choose a reliable platform and take precautions.
Another reason why P2P trading has become popular in African countries is the ability to buy cryptocurrency without a bank account. All that is required to carry out operations is telephone and Internet access. P2P trading gives access to a large number of offers and has a wide range of payment methods. At the same time, there is zero or low commission, which makes P2P platforms even more attractive. However, the exchange process can take quite a long time due to possible delays or refusals that the buyer or seller decided on at the time of the transaction. In addition to platforms, private exchangers are used on the website, in telegram bots, and mobile applications. They are quite easy to navigate and exchanges are faster.
Should the African Crypto Market be Underestimated?
At first glance, the African crypto market looks small and lacks innovative projects. For the vast majority of residents, cryptocurrency continues to be a not fully understood, but effective tool. Where else than here are digital assets in demand, because people do not work in the traditional banking system, so advanced technologies such as cryptocurrency are easily accepted, especially in Nigeria.
Knowing how to buy cryptocurrency is determined by the volatility of national currencies. The stronger the inflation, the higher the need to purchase cryptocurrencies, and the accelerated growth of the crypto market is proof of this. Nigerians, despite the bans, continue to trade crypto assets through exchanges and brokers. This also allows one to save on cross-border transfers, because exchanging cryptocurrency requires mere pennies. And this played into the hands of the P2P platforms, because they allow users to change cryptocurrency without intermediaries, directly.
Some experts believe that the introduction of the naira digital currency is just a preparation for changing the financial system to more effectively implement cryptocurrencies so common in Nigeria. Contrary to the expectations of the authorities, the national currency eNaira has attracted only a tiny percentage of users.
Currently, Africa is experiencing an unprecedented boom in the popularity of digital currencies and payments. From July last year to June 2023, the number of cryptocurrency transactions in Nigeria was about $56 billion. According to recent studies, Nigeria is the second largest market P2P BTC after the United States, which demonstrates the high interest of the country's residents in cryptocurrency.
Conclusion
Today, Nigeria has the fastest growing cryptocurrency market on the world stage. Cryptocurrency trading has become an active source of income for local residents due to the speed and low cost of money transfers. Despite Nigerian politicians opposing the proliferation of cryptocurrency exchanges, the increasing popularity of digital assets in Nigeria bodes well for the creation and development of future exchanges in the country.
