The Chief Executive Officer of one of the leading cryptocurrency platforms in Nigeria, NoOnes, Ray Youssef, has revealed that peer-to-peer popularly known as P2P is probably like $500bn business in Nigeria alone.
Youssef said this in an interview with Techpoint Africa on the heels of an imminent ban on cryptocurrency in the country.
Speaking on the astronomical P2P transactions on Friday, the NoOnes boss asserted, “Peer-to-peer is probably like a half a trillion dollar business inside Nigeria alone. That’s the truth. Officially, cryptocurrency volume in Nigeria is at $59 billion a year, and that’s just all the official volume of everything that is happening on centralised exchanges that can be tracked on the blockchain. Yeah, let’s say $59bn to $60bn.
“That’s a joke; the real volume is ten times more than that. That’s peer-to-peer, and that’s not just volume that has happened.”
Youssef added that most of the P2P transactions do not happen on Binance or any other platform but on WhatsApp, Telegram, coffee shops and everywhere on the streets.
“Most peer-to-peer doesn’t happen on Binance P2P or NoOnes or any of these other platforms. They happen on WhatsApp, Telegram, the coffee shops, everywhere on the streets. That’s where most peer-to-peer is really happening. And in fact I would even say $60 billion going through the centralised exchanges. I think most of that is actually peer-to-peer volume they are kinda covering up too because Nigerians are very crafty and have ways to use things for things they weren’t necessarily mean’t to be used for,” he maintained.
Recall that in February 2021, the Central Bank of Nigeria issued a circular to deposit money banks (DMBs), non-bank financial institutions (NBFIs), and OFIs to close accounts of persons or entities involved in cryptocurrency transactions within their systems.
But the administration of President Bola Tinubu lifted the ban directing all banks and OFIs to carry out cryptocurrency services with with the provisions of the guidelines to regulate the activities of virtual assets service providers.
The aftermath of the ban was the discovery by CBN that crypto traders use peer-to-peer trading to manipulate the naira via a pump-and-dump strategy.
In February 2024, the Central Bank Governor, Olayemi Cardoso, claimed $26 billion in untraceable transactions were processed by Binance.
This led to a crackdown on the global exchange Binance and the freezing of over 1,000 bank accounts involved in peer-to-peer transactions.
However, Nigerians, especially the P2P traders have begun to express displeasure at the new development by the Federal Government as many believe that cryptocurrency is legal and should not be seen as a factor behind the naira weakening.
A user, Kalu Aja, wrote in a thread on his handle, @FinPlanKaluAja2, “The Nigerian economy is slowing grinding to insignificance.
“The economy is dying. The policymakers (Central Bank of Nigeria) know and are already warning with specificity.
“The political class response is to divide and distract.
“Guys I am not being alarmist; the economy is failing, it’s not my data or analysis.”
He claimed that economic activity has been contracting for eight consecutive months, mainly due to exchange rate pressures, rising input prices, security challenges, and others.
He added that the Composite Purchasing Managers’ Index declined sharply to 39.2 index points in February 2024 from 48.5 index points in the previous month.
He continued, ‘Both food and core inflation rose in February 2024, underpinning an acceleration in headline inflation to 31.70 per cent in February 2024 from 29.90 per cent in the previous month. This continued rise in inflation was mainly due to high production costs, lingering 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.
“Rather than battling against cryptocurrency, why isn’t the Central Bank of Nigeria focused on leveraging the system to their advantage? Why not concentrate 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.