BDC Shutdown in Abuja has not attributed to the cryptocurrency P2P market according to Kue Barinor Paul an analyst for Nigerian Web3.
Based on the statements made by Kue Barinor Paul, a legal representative and analyst for Nigerian Web3, the Nigerian cryptocurrency peer-to-peer (P2P) market is not responsible for the closure of the Bureau De Change (BDC)chapter in the nation’s capital.
Nigerian currency dealers, also known as Bureau de Change (BDC) operators, have reportedly declared that they have ceased operations in Abuja due to a lack of dollars.
The local media reported this information. According to reports, the currency dealers pointed to the existence of crypto P2P as a reason for the problems that it is experiencing.
During an interview, Paul made it clear that the charges are without foundation, highlighting the fact that bitcoin plays a relatively limited role in the activities of Nigeria’s foreign exchange market.
He was informed that other significant causes such as swings in prices and the country’s reliance on imports, contribute more substantially to the presence of foreign exchange shortages.
According to Paul, Business development companies (BDCs) deal in tangible fiat currency, but cryptocurrency transactions are conducted online using digital assets such as stablecoins.
As a result, there is no direct competition between the BDCs and the cryptocurrency landscape. Putting the blame for the illiquidity problem of BDC dealers on the peer-to-peer (P2P) market for cryptocurrencies is according to him, a distraction from the fundamental factors that are driving the crisis.
The prohibition imposed by the Central Bank of Nigeria in 2021 has made Nigeria the largest peer-to-peer market in the world. In December 2023, a circular distributed to banks overturned the ban on Nigerian banks supporting cryptocurrency transactions.
A significant number of Nigerians who deal with foreign exchange (FX) face difficulties while attempting to complete a large number of transactions using traditional banking methods.
The banking sector now charges substantially higher fees for transferring foreign currency compared to the cryptocurrency market.
As a result, the cryptocurrency peer-to-peer market is the more convenient choice. Rume Ophi, a Nigerian crypto analyst, echoed Paul’s sentiments by stating that the cryptocurrency ecosystem encourages transaction inclusion, particularly in Nigeria’s free foreign exchange market.
This makes it easier for individuals to acquire access to foreign exchange and protect their naira from inflation. The world is increasingly adopting digitalization, making technical innovation a crucial component.
Among the traditional companies, such as BDCs, Paul identified a possibility for collaboration between digital currency operators and traditional players.
Paul, however, underlined that in order for that to occur, the government must first regulate both sectors and investigate the ways in which BDCs might optimize their operations through the utilization of technology.
Ophi who supports maintaining the cryptocurrency area, argues that regulating cryptocurrency in a suitable manner and understanding the actors and functioning of the industry are essential for effective control.