Nigeria considers ban on naira-based peer-to-peer cryptocurrency trading

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The Nigerian government is preparing to enact new laws that would outlaw peer-to-peer cryptocurrency exchanges that use the country’s naira.

The new rules are aimed at keeping the local currency safe from manipulation by abolishing the naira from peer-to-peer exchanges.

The Nigerian government is preparing to enact new laws that would ban peer-to-peer (P2P) cryptocurrency exchanges using the naira.

Bloomberg reported on Tuesday that Nigeria’s Securities and Exchange Commission (SEC) plans to introduce a new regulatory framework “in the coming days” for custodians, cryptocurrency exchanges and other industry companies.

According to SEC Director-General Emomotimi Agama, the new regulations are aimed at keeping the local currency safe from manipulation by delisting the naira from peer-to-peer exchanges. He said:

“Recent concerns about cryptocurrency P2P traders and their impact on the Naira exchange rate have highlighted the need for collective action.”

The announcement comes after international cryptocurrency exchange Binance was hit with a local ban and its executives Tigran Gambaryan and Nadeem Anjarwalla were detained in Nigeria in February 2024.

Gambarian, who is imprisoned at Kuje Prison in Abuja, Nigeria, is scheduled to stand trial on May 17 on charges of money laundering, currency speculation and tax evasion.

Major CEX platforms such as Binance offer their own P2P marketplaces, allowing users to seamlessly switch between CEX and P2P when needed. Nonetheless, in March 2024, Binance removed naira from its P2P platform due to the Nigerian government’s massive crackdown on exchanges.

Nigerian regulators continued to pressure Binance and its executives to remove the naira from its P2P services, which led to Gambarian being detained and jailed.

After detaining two Binance employees, the Nigerian government was accused of “setting a dangerous new precedent for all companies around the world.” Binance CEO Richard Teng said on May 7 when he released comprehensive records of Gambarian’s imprisonment.

Despite the expected P2P ban in Nigeria and Binance’s regulatory history, P2P cryptocurrency trading is not expected to disappear permanently from the country.

Nigerians will likely still be able to transact in US dollars on peer-to-peer markets. Proponents of this field argue that making P2P illegal is difficult.

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