Nigeria's Cryptocurrency P2P Market not to Blame for BDC Shutdown, says Web3 Analyst
Summary:
Nigerian Web3 legal consultant, Kue Barinor Paul, refutes claims that the growth of the Nigerian P2P cryptocurrency market led to the shutdown of Abuja's Bureau De Change (BDC) operations. Paul states that cryptocurrencies play a minor role in Nigeria's foreign exchange activities, with more significant factors such as price fluctuations and import reliance impacting the forex market. He further iterates that physical fiat and digital cryptocurrency markets do not directly compete. The claims, according to him, divert from real issues causing the problem. Finally, Paul sees potential for collaboration between traditional entities like BDCs and digital currency providers if adequately regulated by the government.
Kue Barinor Paul, a Web3 legal consultant and analyst from Nigeria, has dismissed claims that the closure of the country's Bureau De Change (BDC) sector in the capital is due to the rise of the Nigerian P2P cryptocurrency market. Currency exchange platforms, also known as BDC operators, in Abuja have reportedly had to halt their services due to a lack of available dollars and have blamed the growth of crypto P2P for their difficulties.
Speaking to Cointelegraph, Paul dismissed these accusations as unfounded, underscoring the minor part cryptocurrency plays in Nigerian foreign exchange endeavors. He highlighted that other elements, including price volatility and the nation’s heavy import reliance, are more impactful on the scarcity of foreign exchange.
Paul asserted that BDC operations involve tangible cash transactions, while cryptocurrency deals rely on online trades using digital assets like stablecoins, thereby indicating no direct rivalry between the two. He went on to denounce claims that blame the BDC's liquidity issues on the crypto P2P market, stating that these allegations only divert attention away from the actual factors contributing to the issue.
Nigeria currently boasts the world's largest P2P market, a direct consequence of the 2021 Central Bank of Nigeria (CBN) prohibition on such transactions. Nevertheless, a December 2023 communication to banks lifted this ban, allowing Nigerian banks to handle cryptocurrency transactions again. Paul observed that given the high fees charged by banks for foreign currency transfers, the crypto P2P market serves as a more financially viable alternative.
Supporting Paul's comments, Nigerian cryptocurrency expert Rume Ophi noted the inclusivity offered by the crypto sector, particularly in Nigeria's flexible foreign exchange market. This facilitates easier access to foreign exchange and enables individuals to protect their local currency from inflation amid the global shift towards digitalization.
In terms of how to move forward, Paul believes that collaboration between traditional entities like BDCs and digital currency providers could be fruitful. For this to materialize, he emphasized the need for government regulation in both spheres, alongside an exploration of how BDCs might use technology to elevate their operations. Ophi agrees on the need for proper regulation of the crypto sector, stressing that the government needs to comprehend the operations and players within the crypto domain to effectively regulate it.
Published At
2/3/2024 4:54:52 PM
Disclaimer: Algoine does not endorse any content or product on this page. Readers should conduct their own research before taking any actions related to the asset, company, or any information in this article and assume full responsibility for their decisions. This article should not be considered as investment advice. Our news is prepared with AI support.
Do you suspect this content may be misleading, incomplete, or inappropriate in any way, requiring modification or removal?
We appreciate your report.