In recent developments, Kue Barinor Paul, a prominent Web3 legal representative and analyst in Nigeria, has refuted claims attributing the closure of Bureau De Change (BDC) operations in Abuja, the nation’s capital, to the burgeoning peer-to-peer (P2P) cryptocurrency market. Local media reports have surfaced, suggesting that BDC operators in Abuja are halting their services due to an acute shortage of United States dollars, with some pointing fingers at the P2P crypto exchange as a contributing factor to their difficulties.
During an interview, Paul dismissed these allegations as unfounded, arguing that the role of cryptocurrency in Nigeria’s foreign exchange (forex) activities is minimal. He attributed the forex scarcity primarily to factors like price volatility and Nigeria’s heavy dependence on imports rather than the influence of digital currencies. Paul emphasized the distinction between the operations of BDCs, which involve physical fiat transactions, and the crypto sector, where exchanges occur digitally, often through stablecoins, indicating that there is no direct competition between the two.
Nigeria’s position as a leading P2P cryptocurrency market globally was cemented following the Central Bank of Nigeria’s 2021 prohibition on crypto transactions by financial institutions, a ban that was partially lifted in December 2023 to allow banks to facilitate cryptocurrency dealings. This backdrop has heightened the appeal of P2P crypto transactions, especially as traditional banking avenues for foreign exchange face challenges, including high transfer fees compared to those in the crypto space.
Paul’s assertions find support from Rume Ophi, another Nigerian crypto analyst, who champions the inclusivity of transactions within the crypto sphere. Ophi highlights the convenience and accessibility to foreign exchange that cryptocurrencies offer, presenting a viable option for individuals looking to protect their assets against inflation and the depreciating Nigerian naira.
Moreover, Paul advocates for potential synergies between traditional forex entities like BDCs and the digital currency sector. He suggests that with appropriate regulation and technological integration, both domains could benefit from each other’s strengths. However, this requires a regulatory framework that comprehensively understands the nuances of cryptocurrency operations, ensuring a balanced and effective oversight.
The call for regulation is echoed by Ophi, who stresses the importance of a well-informed governmental approach towards cryptocurrency, aiming for a regulatory environment that fosters growth while mitigating risks associated with digital currency transactions. This discourse highlights the complex interplay between traditional and digital finance sectors, underscoring the need for a nuanced understanding and collaborative regulatory strategies to harness the benefits of technological advancements in finance.
