Although the legal framework for cryptocurrencies and cryptocurrency exchanges in Nigeria has not yet been created, lawmakers have requested that regulatory bodies quickly develop a plan for their implementation. Though there are several criticisms of cryptocurrencies in Nigeria, they are not illegal or regulated. The primary criticism of cryptocurrencies is their link to criminal activity. This misconception stems from the fact that most cryptocurrencies are decentralized and therefore, have no central control. Furthermore, Nigerian banks are not allowed to trade in cryptocurrencies.
Although the CBN’s recent directives to financial institutions have not prohibited outright trading of virtual currencies in Nigeria, they do prohibit their use and transmission within the financial system of the country. This largely stems from the fact that cryptocurrencies are anonymous and untraceable, making them susceptible to abuse. For these reasons, it is important to understand what the legal framework for virtual currency exchanges in Nigeria is and how it will affect these businesses.
While most Nigerians prefer to use a broker, it is possible to buy and sell cryptos directly through P2P exchange platforms. These platforms generally offer quick payment methods and on-ramps in fiat currencies. Alternatively, you can use a P2P exchange platform to trade with other Nigerians directly. This method, however, requires you to pay a fee for using a third-party exchange.
However, many investors in cryptocurrency in Nigeria don’t see these benefits as such. In fact, they think it is a risky proposition – one that will only lead to increased fraud. But for the moment, it’s a good thing that the cryptocurrency industry in Nigeria has been growing rapidly. Nigerians are using it as a way to bypass the punitive measures that would otherwise come with a ban.
As cryptocurrency grows in popularity, more people will be able to use it. Peer-to-peer transactions and cryptocurrency exchanges are becoming increasingly popular in Nigeria. Although the CBN has repeatedly warned of the risks associated with using cryptocurrency, the fact remains that Nigerians can still transact with crypto. Many people linked their bank accounts to their crypto wallets before the ban. The government’s warnings have made accepting Cryptocurrency in Nigeria difficult.
To make a deposit or withdrawal in crypto, a Nigerian citizen must first convert her fiat currency into a cryptocurrency. However, the fees can be high and can detract from the profit. Besides, some exchanges are not regulated like banks, so it’s important to look for an exchange that is regulated and secure. For example, if you’re from Nigeria, you shouldn’t deposit in Nigerian naira using a shaky e-wallet, but it’s fine if you’re from the United States or Canada.