Nigeria’s crypto adoption rises despite government crackdown

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Nigerian cryptocurrency adoption continues to rise despite government crackdown, with peer-to-peer (P2P) trading volume for Bitcoin posting its second strongest week on record last month.

According to data from Google Trends, Nigeria is still ranking the number by search interest for the keyword Bitcoin at the time of writing. Nigerian Naira-denominated Bitcoin P2P trading also increased steadily in 2021, with Nigeria ranking behind the United States as the second-largest market for peer-to-peer BTC trading, according to Useful Tulips.

The growing adoption of Bitcoin in Nigeria has helped Sub-Saharan Africa become the leading region in terms of P2P volume, with the region posting $ 18.8 million in weekly volume to beat North America by $ 18 million a week. last week.

P2P weekly volume by region (USD equivalent): Usefultulips.org

A confluence of political and economic crises has spurred local adoption of crypto, including social repression, currency controls, and soaring inflation.

Tensions in Nigeria have escalated since October, after massive public protests against police brutality and the infamous Sars Police Unit swept the country.

The EndSars protests saw protesters attacked with tear gas and water cannons, with more than 50 civilians killed in total, including a dozen who were shot dead by police armed with live ammunition on October 20.

The government crackdown also led to economic crackdown, with social organizations supporting protesters with food and medical aid quickly finding their bank accounts frozen. Amid the violence, protesters have increasingly turned to cryptocurrency in order to place their economic activity beyond the reach of governments.

Adewunmi Emoruwa, the founder of Gatefield, a public policy organization whose accounts were suspended for granting grants to journalists covering the protests, attributed Nigeria’s recent hostility over crypto assets to the October protests, saying to the Guardian:

I think EndSars is like the key catalyst in some of these decisions the government makes. It was scary. They saw, for example, that people could decide to bypass government structures and institutions to mobilize.

An anonymous source claiming to represent a social organization whose bank accounts were targeted during the turmoil also told the post that their group was able to pay members’ salaries with crypto despite the financial embargo.

We keep some securities in crypto not too much but enough, sort of an insurance policy, they said. Fortunately, when the ban took place, we were able to pay the salaries.

In February, the government banned licensed banks from processing cryptocurrency transactions in an attempt to crack down on the adoption of digital assets.

However, the steadily increasing Bitcoin P2P volumes in Nigeria suggest that the country’s growing crypto user base has largely been driven underground in an effort to gain access to crypto assets outside of government jurisdiction.

Marius Reitz, African managing director of crypto trading platform Luno, told the Guardian that Nigeria’s ban has only made cryptocurrency trading more difficult to monitor, saying:

Many business activities have now been taken underground, which means that many Nigerians now depend on less secure and transparent over-the-counter channels, as well as Telegram and WhatsApp groups, where people trade directly with each other.

Measures taken by governments to crack down on crypto have also come under internal criticism, with Vice President Yemi Osinbajo publicly berating the ban in February.

Related: Why Is Bitcoin Costing $ 86,000 In Nigeria? Here’s why the BTC premium is huge in some countries

Despite the country’s hostility to decentralized crypto assets, Nigeria is currently exploring the development of a central bank digital currency (CBDC).

At the end of July, Nigeria’s central bank revealed its intention to start testing its CBDC from October 1 of this year.

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