The Nigerian cryptocurrency peer-to-peer (P2P) market is not accountable for the shutdown of the nation capital’s Bureau De Change (BDC) chapter, according to Nigerian Web3 legal representative and analyst Kue Barinor Paul.
According to local media, Nigerian currency traders, otherwise known as Bureau De Change (BDC) operators, have announced the shutdown of operations in Abuja due to the unavailability of dollars. The currency traders reportedly mentioned the existence of crypto P2P as a reason for its woes.
In an interview with Cointelegraph, Paul clarified that the allegations are baseless, emphasizing that cryptocurrency plays a minor role in Nigeria’s forex activities. He pointed out that more significant factors, such as price fluctuations and the country’s reliance on imports, contribute more significantly to forex shortages.
"Crypto P2P businesses in Nigeria are treating dollar BDC operators exactly how email did to the post office.
— Thecryptopreacher. (@Rumerule) February 3, 2024
Why use physical $ when it's cheaper and easier to use stablecoins like USDT, USDC? Indeed, crypto is disruptive. #CryptoRevolution " #bitcoin
Paul explained that the BDCs deal in physical fiat, whereas crypto transactions are carried out online with digital assets like stablecoins, hence, there’s no direct competition between the BDCs and the crypto space. He said blaming the crypto P2P market for the illiquidity problem of BDC dealers is a distraction from facing the real issues causing the problem.
Nigeria is currently the biggest P2P market in the world, which was a direct result of the 2021 CBN ban. However, a circular sent to banks in December 2023 lifted the crypto ban from Nigerian banks facilitating cryptocurrency transactions.
Many Nigerians dealing with foreign exchange (FX) struggle with conducting numerous transactions through traditional banking. Paul noted that the current fees for transferring foreign currency are significantly higher within the banking sector compared to the crypto market, making crypto P2P the more convenient option.
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Supporting Paul’s statement, Nigerian crypto analyst Rume Ophi said The crypto space promotes transaction inclusion, particularly in Nigeria’s free FX market, making it convenient for people to access foreign exchange and hedge their naira against inflation.
As the world embraces digitalization, technological innovation is essential. Paul noted an opportunity for collaboration between traditional players like BDCs and digital currency operators. However, for that to happen, Paul emphasized that the government has to regulate both sectors and see how BDCs can use technology to enhance their transactions.
Cryptocurrency needs to be regulated appropriately, and the government needs to understand the players in crypto and know how they operate to regulate it efficiently, Ophi said in support of holding the crypto space.
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