The evolving relationship between Nigeria and cryptocurrency exchange Binance was a rollercoaster. This was evident in Binance’s decision to discontinue all Nigerian Naira (NGN) services on its platform. While this move was prompted by an escalating legal dispute, it also underscored the resilience of Nigerian crypto users, who have swiftly adapted to the changing and evolving cryptocurrency landscape.
Binance’s exit from Nigeria was not a sudden event but the culmination of increasing regulatory tensions. The Nigerian government accused Binance of facilitating currency speculation and rate-fixing, which officials claimed contributed to the volatility of the Naira. In response, Binance ceased all NGN-related services, converting any remaining Naira balances in user accounts into Tether (USDT), a widely used stablecoin pegged to the US dollar. Deposits and withdrawals of Naira have ceased since March 8, 2024.
Did this development spark any uncertainty in Nigeria’s cryptocurrency ecosystem, given that Binance had been one of the dominant platforms for local traders? Maybe not. Yet, rather than triggering panic, the market is witnessing an intriguing transformation—one that speaks volumes about the ingenuity and resilience of Nigerian crypto enthusiasts.
Rise of Independent Exchanges and P2P Trading
Joshua Ehizibue, founder of Streamlivr, observed a significant shift in the market following Binance’s departure. Rather than viewing this as a setback, many Nigerian traders are embracing new opportunities by turning to independent exchanges and peer-to-peer (P2P) trading platforms.
“There has been a rise in independent exchanges and a strengthening of P2P culture. More Nigerians have formed communities and groups that facilitate secure transactions through escrow accounts managed by neutral and verified individuals,” Ehizibue explained.
The move towards P2P trading is not entirely new for Nigerian cryptocurrency users. Given past regulatory crackdowns on centralized exchanges, many traders had already adopted decentralized methods to buy and sell digital assets. However, Binance’s exit appears to have accelerated this trend, fostering a more community-driven trading environment where trust and reputation play a crucial role.
More Alternative Platforms
Platforms like Bybit, Quidax DeFi, AfriDex, and Uniswap, are reportedly experiencing exponential growth, with some analysts suggesting a staggering 1000x increase in user activity. This shift demonstrates that Nigerian crypto users are not abandoning the market but are instead diversifying their platforms of choice.
“Exchanges like Bybit and MEXC have experienced unprecedented growth due to the influx of former Binance users. With the removal of NGN from fiat assets, there has been a massive liquidation of Naira holdings, driving traders to seek new platforms,” Ehizibue noted.
Beyond traditional exchanges, decentralized finance (DeFi) platforms and on-chain transactions are also gaining traction. As access to centralized fiat ramps diminishes, Nigerians are exploring innovative ways to store and transfer value using cryptocurrency.
As Nigeria continues to lead in global cryptocurrency adoption, its ability to navigate these challenges will set a precedent for the rest of Africa.