According to Ray Youssef, the CEO of NoOnes, a major cryptocurrency platform in Nigeria, peer-to-peer (P2P) trading may be a $500 billion business in Nigeria alone.
Youssef shared this during an interview with Techpoint Africa amidst the imminent ban on cryptocurrency in Nigeria.
In a discussion about the substantial P2P transactions, the NoOnes CEO stated that P2P trading is likely a $500 billion industry within Nigeria. Officially, the cryptocurrency volume in Nigeria is estimated at $59 billion annually, but Youssef believes the real volume is significantly higher, possibly ten times more. He also noted that most P2P transactions occur outside of centralized exchanges like Binance, often taking place on platforms like WhatsApp, Telegram, and in coffee shops and other locations.
He added that the actual P2P volume is much greater than the official figures, and most of the transactions don't occur on traditional platforms.
Youssef also pointed out that a large portion of P2P transactions are not conducted on platforms like Binance P2P or NoOnes but rather on more informal channels such as WhatsApp, Telegram, and in physical locations like coffee shops and on the streets.
He emphasized that a substantial amount of the reported $59-$60 billion volume on centralized exchanges is actually P2P volume that may be obscured, acknowledging the resourcefulness of Nigerians in finding alternative uses for tools.
As a reminder, in February 2021, the Central Bank of Nigeria instructed banks and financial institutions to close accounts associated with cryptocurrency transactions within their systems.
However, the administration under President Bola Tinubu reversed the ban and directed banks and financial institutions to engage in cryptocurrency services within the framework of guidelines aimed at regulating virtual assets service providers.
Following the ban, the Central Bank of Nigeria discovered that crypto traders were utilizing P2P trading to manipulate the naira using a pump-and-dump strategy.
In February 2024, the Central Bank Governor, Olayemi Cardoso, alleged that Binance processed $26 billion in untraceable transactions.
Subsequently, this led to a crackdown on the global exchange Binance and the freezing of over 1,000 bank accounts linked to P2P transactions.
Despite this, many Nigerians, particularly P2P traders, have expressed discontent with the new government directive, contending that cryptocurrency is lawful and should not be blamed for the weakening of the naira.
Kalu Aja, a user, voiced concerns on Twitter about the declining state of the Nigerian economy, criticizing the response of the political class.
He highlighted the dire state of the economy and asserted that policymakers, particularly the Central Bank of Nigeria, are issuing specific warnings.
He also criticized the political class for adopting strategies of division and distraction in light of the economic challenges.
“I'm not trying to cause panic, but the economy is doing badly, and it's not just my opinion, it's based on data and analysis.”
He stated that economic activity has been shrinking for eight months in a row, mainly because of exchange rate pressures, increasing input costs, security challenges, and other factors.
He added that the Composite Purchasing Managers’ Index dropped significantly to 39.2 index points in February 2024 from 48.5 index points in the previous month.
He continued, ‘Both food and core inflation went up in February 2024, leading to an increase in headline inflation to 31.70 per cent in February 2024 from 29.90 per cent in the previous month. This continued inflation rise was mainly due to high production costs, ongoing security challenges and exchange rate pressures,
“All quotes from CBN. Is this an environment that can attract FDI? When are Nigerian companies already in Nigeria not buying or investing?
“Abuja, we have a problem.”
Another user, who tweeted with @trendwithola, said, “So the Central Bank of Nigeria still feels cryptocurrency is the cause of Naira woes?
“Naira will keep trailing 1 USD, 1 GBP, 1 CAD if the right thing is not done.
“@cenbank should stop chasing shadows. You had better get your economic policies right. Don’t just copy and paste. Get a blueprint from the man wey sabi, Peter Obi or leave office,” she added.
“Instead of fighting against cryptocurrency, why doesn’t the Central Bank of Nigeria focus on using the system to their advantage? Why not focus on regulating it for beneficial use? After all, you can’t dismantle what you haven’t built,” a user with the handle @Themytea2 submitted.
Recently, at least three Nigerian fintech startups, including Moniepoint, Paga and Palmpay, have threatened to block the accounts of their customers dealing in cryptocurrency and report those transactions to law enforcement agents after the National Security Adviser classified crypto trading as a national security issue.
That designation means a new crypto regulation that will ban peer-to-peer trading of cryptocurrencies is in the works, said Tosin Eniolorunda, the CEO of Moniepoint.
There are also growing concerns that a regulation to ban p2p trading may soon be made public.
