Nigeria secures the top spot in terms of P2P exchange trade volume conducted by crypto users in nations worldwide, as revealed by a recent Chainalysis report. This report provides insights into the interactions between different countries and the crypto market.
P2P trading in crypto is an approach that empowers individuals to buy and sell cryptocurrencies directly, bypassing the need for a centralized intermediary.
On a P2P platform, sellers list their cryptocurrency for sale, including details like amount, price, and accepted payment methods. Buyers browse listings, filter based on preferences, and initiate a trade request.
The platform holds the cryptocurrency in escrow until the seller confirms payment receipt, preventing fraud. After communication, the buyer sends payment, and once confirmed, the platform releases the cryptocurrency to the buyer.
Crypto adoption in Nigeria and how P2P rose
It’s no surprise that Nigeria has taken the lead in the world of cryptocurrencies. Nigerians have long displayed a remarkable interest in the crypto market, evident since August 2022 when they topped global cryptocurrency search trends.
With the statistics of the unbanked population reaching a staggering 64 million as of July 2022, combined with the relentless inflation affecting the naira and the rising unemployment rate, it’s no surprise that young Nigerians perceive cryptocurrencies as a secure refuge.
In Nigeria, peer-to-peer crypto trading has a long-established history, dating back to 2014 or even earlier. Prior to the establishment of dedicated P2P trading platforms, trades used to occur on online groups on WhatsApp, where the main purpose was to facilitate the buying and selling of cryptocurrencies.
In these groups, the admins acted as trustworthy intermediaries, safeguarding the transactions. However, this system faced a significant setback when scams began to infiltrate the groups, leading to a loss of trust among traders.
The rise of peer-to-peer trading in the Nigerian crypto space can also be attributed to the restrictions imposed by the central bank on all commercial banks. These restrictions were put in place to prevent any transactions involving cryptocurrencies.
This situation presented opportunities for crypto exchanges in the market at that time like Binance, and Paxful, to expand leading to a surge in the P2P market.
Using P2P removes the difficulty of dealing directly with banks and connections with personal crypto accounts. Therefore, it has become a major way local crypto users buy and sell using Naira and USDT.
Other spots and nations
Nigeria was also mentioned as the number 2 spot for the overall crypto ranking index, and position 3 for centralized service value received ranking. It ranked second position, for retail centralized service value received, and fourth for both DeFi value received and retail DeFi value received.
India took the top spot for the overall index as Vietnam, the US, Ukraine, Philippines, Indonesia, Pakistan, Brazil and Thailand ran third position through tenth positions. The next ten are China, Turkey, Russia, UK, Argentina, Mexico, Bangladesh, Japan, Canada, and Morocco.
Read also; Nigeria’s Crypto Market: Soaring Adoption and Engagement — Report