Last Updated on December 20, 2022
Nigeria undoubtedly has one of the largest Bitcoin markets in Africa and has experienced an astronomical growth of more than 20% in recent years.
Lots of people are looking for how to trade bitcoin in Nigeria after ban by the government.
The central bank of Nigeria issued a ban that financial institutions restrict them from facilitating any transaction related to cryptocurrencies which include the buying and selling of Bitcoin and other altcoins and other digital assets through the banks. The ban further explained that financial institutions should close the accounts of customers involved in crypto trading and whichever financial institution fails to do that will be penalized by the central bank.
The ban was so sudden and devastating for Nigerians Many had their money locked up in one exchange or the other and couldn’t convert it to fiat because of fear of getting their bank account closed and locked for trading in cryptocurrency.
However, they still need to develop a means to remove their money stuck on those exchanges hence finding an alternative. With the active ban on cryptocurrencies, one would think that the rate of bitcoin trading will decline, but that is not the case. Nigerians are still heavily involved in cryptocurrency trading.
The reason is not far-fetched. People still buy Bitcoin in Nigeria because of the rise in inflation and the lack of confidence in traditional fiat. The Nigerian naira has suffered a rapid decrease in value in the last few years and the way around that is to store the value of the money by buying assets like gold, diamonds, and digital assets.
See: Best Crypto Trading Platforms in Nigeria
How to Trade Bitcoin in Nigeria after Ban (Step-by-Step)
In the circular passed around by the central bank of Nigeria, it explained that the reason for the ban was that cryptocurrency has recently been used in Nigeria for fraudulent activities and the activities are untraceable.
Therefore the ban is to remove the link connecting the financial institutions to such activities. Therefore, in reality, cryptocurrency isn’t banned, but the exchange of crypto to naira.
With that being said, there are two major ways Nigerians are trading cryptocurrency despite the crackdown and they include Peer-to-Peer Platforms and the use of alternative currency. Let’s briefly take a look at them.
1. Peer-to-Peer Crypto Exchanges
Peer-to-Peer crypto exchange is also known as P2P crypto Exchange. These are platforms that link buyers and sellers together to exchange digital assets directly without the financial institutions. The platform serves as an intermediary that not only links buyers and sellers together but also confirms transactions that are carried out on the platform to ensure it is being carried out promptly.
This provides the first alternative for people to buy Bitcoin in Nigeria and there was a rapid switch of users from other exchange platforms to Peer-to-Peer P2p crypto exchanges in Nigeria. Exchanges like Binance P2P have joined the likes of Remitano and Paxful by integrating a Peer-to-Peer exchange on their platform.
However, buying through a peer-to-peer platform is of two kinds, we have the crypto P2P and the Naira P2P. For the crypto P2P, you can buy Bitcoin using altcoins like Ethereum, Cardano, Binance coin, etc. when selling, instead of you being paid in Nigerian naira, you get paid with a digital currency that will be transferred to your wallet.
The second form is through the Naira P2P. In this case, you buy Bitcoin with naira which you transfer directly into the seller’s bank account with descriptions that don’t indicate cryptocurrency so your account won’t be flagged.
Also See: How to Buy Cryptocurrency in Nigeria
2. The Use of Alternative currencies
Since the issue with cryptocurrency in Nigeria is buying through financial institutions with naira. You can also buy with other currencies like the US Dollar, Pound and the South African Rand, etc. thereafter you can exchange the currency for the Nigerian naira.
On some P2P platforms, there is a digital currency called the Nigerian Naira Tether NGNT which is the virtual form of our traditional fiat. It has the same value as traditional naira, so you can easily sell it and transfer the money into your local bank account.
The second way to use the alternative currency is through stablecoins. Stablecoins are digital currencies that are linked to underlying assets such as fiat currencies and precious metals. USDT is an example of Stablecoins because its value is pegged to the US dollar. Stablecoins can retain their value for a long period. They are regarded as a hideout for traders. Whenever you want to save your crypto without the fear of devaluation, you buy stablecoins.
Nigerians buy Bitcoin with stablecoins and also they exchange their Bitcoin into stable coins whenever they need the money they can as well sell through P2P platforms or brokers and get paid into their bank accounts the equivalent of the stablecoin at favourable rates.
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Step-By-Step Guide on How to Trade Bitcoin in Nigeria After Ban
To trade bitcoin in Nigeria or other crypto assets there are certain steps you have to follow, no matter the cryptocurrency exchange, platform or service you use:
Step 1. Choose Crypto/Bitcoin Wallet
When you buy, sell or trade bitcoin or any other crypto, you’ll need to store it, so you need access to a crypto wallet. You can use a hot or cold wallet for this. Hot wallets include wallets provided by crypto exchanges, crypto platforms, desktop software wallets or crypto apps. Here are some of the best crypto and bitcoin wallets in Nigeria.
Step 2. Choose where to Trade Bitcoin from in Nigeria
There are a bunch of apps, platforms and sites to trade bitcoin in Nigeria. it is important you find a reliable one that is suitable for you. These platforms for purchasing crypto can be divided into three; Crypto brokers, Cryptocurrency trading platforms and Peer-to-peer (P2P) crypto exchanges.
Crypto brokers usually offer easy payment methods like bank transfers or debit card payments to users.
Crypto trading platforms on the other hand give users the ability to easily trade cryptocurrencies by allowing them easily deposit fiat money (like Naira and dollars). So they can use it to purchase coins that they want to trade.
While P2P crypto exchanges enable people to easily buy cryptocurrencies from other people by matching buyers and sellers and using an escrow system to make sure that neither the seller nor buyer is scammed. The best crypto platforms tend to offer two or all of these features.
Step 3. Trade Bitcoin in Nigeria
This is where you trade bitcoin, which means you’ll have to create an account with a crypto broker or exchange that allows Naira payments.
Almost all crypto platforms will require a Know-Your-Customer (KYC) process before you can start buying bitcoin or any of the altcoins. This process involves verifying your identity with a valid identification document.
After this process is complete, you can now go ahead and buy any cryptocurrency you want using any payment method that is suitable for you. Just make sure you check the total cost for the transaction before confirming your purchase.
How to Trade Bitcoin in Nigeria after Ban using Best Apps & Sites?
Some of the best platforms, apps and sites to buy bitcoin alt crypto from in Nigeria are:
Payment Methods to Trade Bitcoin in Nigeria
If you’re going to trade bitcoin in Nigeria after the ban, then you need payment methods that are suitable for you. Here are some of the payment methods for buying bitcoin in Nigeria:
How to Trade Bitcoin in Nigeria after Ban with a Credit/debit card
It’s very convenient to use cards to buy bitcoin and other cryptos despite the processing fees they incur. However the recent CBN crypto restrictions mean it is not possible to buy Bitcoin and other crypto-assets using naira credit or debit cards.
Trade Bitcoin in Nigeria with Bank transfer or deposit
The current CBN crypto policies mean Nigerians have had to turn to bank transfers to purchase cryptocurrencies through Peer-to-peer crypto exchanges. P2P allows Nigerians to trade bitcoin in Nigeria by paying through bank transfers.
P2P is one of the cheapest ways to buy cryptocurrencies, as it is a direct purchase between buyers and sellers with no middlemen.
Buy Cryptocurrency with Cash payments
This payment method involves using cash (naira or any fiat currency) to buy bitcoin or altcoins. You can do this using LocalBitcoins; which allows you to find a local crypto vendor who accepts cash payments. Otherwise, you can use a Bitcoin ATM to buy directly, however, Bitcoin ATM fees tend to be high compared to other payment methods.
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