How are Nigerians trading Bitcoin despite the government crackdown?

The central bank of Nigeria issued a ban that financial institutions restricting them from facilitating any transaction related to cryptocurrencies which include the buying and selling of Bitcoin and other altcoins and other digital assets through the banks.

The ban further explained that financial institutions should close the accounts of customers involved in crypto trading and whichever financial institution fails to do that will be penalized by the central bank.

The ban was so sudden and devastating for Nigerians Many had their money locked up in one exchange or the other and couldn’t convert it to fiat because of fear of getting their bank account closed and locked for trading in cryptocurrency.

However, they still need to develop a means to remove their money stuck on those exchanges hence finding an alternative. With the active ban on cryptocurrencies, one would think that the rate of bitcoin trading will decline, but that is not the case. Nigerians are still heavily involved in cryptocurrency trading.

The reason is not far-fetched. People still buy Bitcoin in Nigeria because of the rise in inflation and the lack of confidence in traditional fiat. Nigerian naira has suffered a rapid decrease in value in the last few years and the way around that is to store the value of the money by buying assets like gold, diamonds, and digital assets.

Find out how the Nigerian youths are using cryptocurrency to combat unemployment in the country.

How Nigerians trade Bitcoin

In the circular passed around by the central bank of Nigeria, it explained that the reason for the ban was because cryptocurrency has recently been used in Nigeria for fraudulent activities and the activities are untraceable. Therefore the ban is to remove the link connecting the financial institutions to such activities. Therefore, in reality, cryptocurrency isn’t banned, but the exchange of crypto to naira.

With that being said, there are two major ways Nigerians are trading cryptocurrency despite the crackdown and they include Peer-to-Peer Platforms and the use of alternative currency. Let’s briefly take a look at them.

Peer-to-Peer Exchanges

Peer-to-Peer exchange is also known as P2P Exchange. These are platforms that link buyers and sellers together to exchange digital assets directly without the financial institutions. The platform serves as an intermediary that not only links buyers and sellers together but also confirms transactions that are carried out on the platform to ensure it is being carried out promptly.

This provides the first alternative for people to buy Bitcoin in Nigeria and there was a rapid switch of users from other exchange platforms to Peer-to-Peer Platforms. Exchanges like that of Binance join the likes of Remitano and Paxful by integrating a Peer-to-Peer exchange on their platform.

However, buying through a peer-to-peer platform is of two kinds, we have the crypto P2P and the Naira P2P. For the crypto P2P, you can buy Bitcoin using altcoins like Ethereum, Cardano, Binance coin, etc. when selling, instead of you being paid in Nigerian naira, you get paid with a digital currency that will be transferred to your wallet.

The second form is through the Naira P2P. In this case, you buy Bitcoin with naira which you transfer directly into the seller's bank account with descriptions that don’t indicate cryptocurrency so your account won’t be flagged.

Simple steps to buy bitcoin on Remitano P2P

Visit the Remitano homepage and click on register at the top right corner to create an account. Make sure you read and understand the terms and conditions before proceeding with the registration.
Once your account has been successfully created, navigate to the KYC/AML section to complete the process (it is mandatory). Provide the requirement to complete the KYC/AML verification. Be rest assured your data is safe, secure, and encrypted with Remitano.
Deposit Naira into your Naira fiat wallet through the number of ways available on the platform.
Once your account is funded, navigate to the “Wallet” section on your dashboard, where you will be able to buy bitcoin.
Purchased BTC can also be safely traded on the Remitano platform.

2. The Use of Alternative currencies

Since the issue with cryptocurrency in Nigeria is buying through the financial institutions with naira. You can also buy with other currencies like the US Dollar, Pound, and South African Rand, etc. thereafter you can exchange the currency into the Nigerian naira. On some P2P platforms, there is a digital currency called Nigerian Naira Tether NGNT which is the virtual form of our traditional fiat. It has the same value as the traditional naira, so you can easily sell it and transfer the money into your local bank account.

The second way to use the alternative currency is through stable coins. Stable coins are digital currencies that are linked to underlying assets such as fiat currencies and precious metals. USDT is an example of Stablecoins because its value is pegged to the US dollar. Stable coins can retain their value for a long period. They are regarded as a hideout for traders. Whenever you want to save your crypto without the fear of devaluation, you buy stable coins.

Nigerians buy Bitcoin with stable coins and also they exchange their Bitcoin into stable coins which whenever they need the money they can as well sell through P2P platforms or brokers and get paid into their bank accounts the equivalent of the stable coin at favorable rates.

These are the two major ways to buy Bitcoin in Nigeria. An uncommon way people use is using their debit card on some payment app that has provisions for cryptocurrency so they buy cryptocurrency with naira as if they are making payment for some goods or services.

The young and educated population along with increased internet adoption has facilitated the exponential adoption of bitcoin. The borderless nature of bitcoin makes it a great option for making both local and international payments. Despite the crypto ban, Nigerians are not giving up on bitcoin because it has outperformed every Naira-based asset in every way, and P2P exchanges like Remitano make bitcoin trading easy for them.

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