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Nigeria’s Crypto Ban is Ineffective

Seven months after Nigerian banks were barred from enabling cryptocurrency transactions, bitcoin remains an actively traded asset in the country, partly due to the presence of platforms that enable peer-to-peer transfers. The value of bitcoin traded on LocalBitcoins and Paxful—two platforms that match crypto sellers with buyers—grew from $32 million in January and February this year to more than $44 million in August. Most of that has been on Paxful, which has 1.5 million users in Nigeria out of its global base of 7 million users. According to Paxful’s co-founder and CEO, Ray Youssef, of all the African users on their platform, 46% are between 25 and 40, whereas 41% are 18-25 years. Through their program, Paxful’s Built With Bitcoin Foundation, the company has built 6 schools on the continent so far. In February this year, the Central Bank of Nigeria (CBN) ordered that all banks close any accounts transacting with cryptocurrencies. According to the CBN letter, regulated institutions are prohibited from dealing in crypto or facilitating payments for digital coin exchanges. In addition, anyone found breaching this order will face severe sanctions.