Crypto: Nigeria Dragging Foot Among Nations

Who wants to delist the Naira from P2P trading platforms? Who wants Nigeria to lose a whopping $500 billion in market cap, which is needed in times like this to save the country’s economy from sinking due to inflation? Who wants Nigeria and her President – Bola Ahmed Tinubu – to fail in the attempt to save the economy that is lacking foreign investments? Who wants Nigeria to suffer more dollar scarcity?

Who prefers that Nigeria borrows $500 billion from the International Monetary Fund (IMF) and World Bank, or China Exim Bank, when a low-hanging fruit of $500 billion is dangling before President Tinubu’s administration? Who prefers unemployment to employed youths in an ever-changing tech-ruled world?

Is it the Acting Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama? Is it the Central Bank of Nigeria governor, Olayemi Cardoso? Is it the National Security Adviser, Nuhu Ribadu? Has the Minister of Finance, Wale Edun, hand in it? Is it the Senate Committee on Finance or the House of Representatives Committee on Finance? Is it the Senate Committee on National Security and Intelligence or its House of Representatives counterpart?

It is important to call the attention of these personnel, agencies and committees and remind them that their advertent and inadvertent policies and moves against the crypto and peer–to–peer, popularly called P2P, will cause the country to lose a whopping $500 billion.

The recent statement which was accredited to the Acting Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama, who is advocating for a new cryptocurrency measure that aims to remove the naira as a currency pair from cryptocurrency peer-to-peer platforms should be thoroughly vetted.

Agama stressed the need to clean up the virtual assets space from illegal trading activities and safeguard the integrity of the Nigerian capital market during a virtual meeting with the Blockchain Industry Coordinating Committee of Nigeria (BICCoN).

According to him, the commission’s readiness to enforce the Investments and Securities Act of 2007 vigorously, is aimed at ensuring that all market participants adhere to the established legal frameworks, despite the technological advances in digital assets.

The Nigerian government under former president, Muhammadu Buhari, through the then and now embattled CBN governor, Godwin Emefiele, banned official transactions of crypto by Nigerians through deposit money banks (DMBs), non-bank financial institutions (NBFIs) in February 2021. The circular also mandated OFIs to close accounts of persons or entities involved in cryptocurrency transactions within their systems.

What was the result, Nigerian youths who are major dealers, and politicians who are secretly trading, developed the peer-to-peer means of settlement. No official record from the Buhari administration showed that there was a decline in crypto trading. What P2P achieved was that it addressed the multiple deductions by DMOs and NBFIs.

In that way, youths and other Nigerian crypto traders were able to be in total control of their money and its movements. The federal government also lost every tax it was getting through electronic charges. The government of Buhari from that singular action started to lose a chunk of revenue that would have forestalled the illegal printing of ways and means in excess of N23 trillion.

It is worth noting that the accusations heaped on Nigerians who were genuinely trading crypto, such as terrorism, currency speculation, and insecurity, did not reduce after the ban.

Why? Insecurity and economic issues in Nigeria were the result of political decisions and corruption.

President Tinubu lifted the ban, directing all banks and OFIs to carry out cryptocurrency services with the provisions of the guidelines to regulate the activities of virtual assets service providers. Young Nigerians who were marred by unemployment, but found refuge, legal refuge, in crypto trading jubilated. At last, a government by one who had a career in the financial sector and understood the unending innovation associated with the financial sector has come and heard the voice of reason.

It is, however, unfortunate that an administration greeted with a standing ovation for lifting the ban on crypto trading is toeing the bound-to-lose path former president Buhari, took.

President Tinubu’s administration wants to spread the net wide to capture every revenue his administration needs. Too many taxes and increases in taxes have been introduced. Yet, Tinubu is allowing some members of his ill-advised cabinet and appointees to toe the ineffective line of delisting the Naira as one of the currencies to be traded in P2P on crypto platforms.

The worst path of this is that these cabinet members of Tinubu’s government could see clearly how Emefiele and Buhari ended. Yet, they want to end there – Disastrous! It does actually seem that when the government of Nigeria exhausts financial and economic policies to grow the country, they resort to defending the Naira and chasing after crypto and young Nigerians who are making ends meet in a legal way.

Otherwise, why on earth would the Acting Director General of the Securities and Exchange Commission (SEC), Dr. Emomotimi Agama think about delisting Naira from P2P trading across all crypto trading platforms?

According to the Chief Executive Officer of one of the leading cryptocurrency platforms in Nigeria, NoOnes, Ray Youssef, peer-to-peer, popularly known as P2P, is a $500bn business in Nigeria alone.

Youssef in an interview with Techpoint said “Peer-to-peer is probably like a half a trillion dollar business inside Nigeria alone. That’s the truth. Officially, cryptocurrency volume in Nigeria is at $59 billion a year, and that’s just all the official volume of everything that is happening on centralized exchanges that can be tracked on the blockchain. Yeah, let’s say $59bn to $60bn.

“That’s a joke; the real volume is ten times more than that. That’s peer-to-peer, and that’s not just volume that has happened.”

How then would the Tinubu administration risk losing such billions of dollars in its first few months of governing Nigeria just because of fake and easy-to-address fears and ego? The Tinubu government should focus on harnessing the billion-dollar market value of trading Naira on P2P. This would give the country and her too many unemployed, yet innovative, daredevil industrious and tech youths the opportunity to thrive. 

Ray during the interview, also x-rayed what happens in the unofficial P2P market, and how much more Nigeria would lose if she toes the bound-to-fail path of delisting Naira in P2P trading.

“Most peer-to-peer doesn’t happen on Binance P2P or NoOnes or any of these other platforms. They happen on WhatsApp, Telegram, coffee shops, and everywhere on the streets. That’s where most peer-to-peer is really happening. And in fact, I would even say $60 billion going through the centralized exchanges. I think most of that is actually peer-to-peer volume they are kinda covering up too because Nigerians are very crafty and have ways to use things for things they weren’t necessarily meant to be used for,” Ray told Techpoint.

Financial expert, Kalu Aja, on May 7 asked a pertinent question to the FG concerning delisting Nairaa from P2P trading platforms. He asked, “Did the FGN put Nigeria in P2P in the first place? P2P means Person to Person. It means I and Ronke exchange $ for N, Ronke gives me N, I give her $. If this occurs and Ronke transfers Naira to my bank account for “upkeep” and I do the same offshore, how can you ban it? Can you ban what you don’t know is occurring? If you want a stronger Naira, export more crude oil and stop chasing shadows.”

How can Nigeria’s government under Tinubu harness the 500-billion-dollar P2P market, which is obviously worth more than the total – and now almost completely depleted – external reserve of less than $4 billion? China, the European Union, G7 nations, the United Kingdom and the United States have already shown the light.

What the federal government needs is to humble itself, be open-minded and embrace the endless opportunities in the crypto world. China went rough on crypto through varying tough policies. But today, China has embraced crypto and its innovative prowess, which has tilted the country towards launching a digital Yuan, and become the go-to, leading nation in crypto.

China is doing everything possible for its population to maximize crypto through its currency, Yuan. To combat the fears of regulation, terrorism financing, hacking, scams and other vices, China is daily understanding the crypto market, positioning the Yuan and putting policies in place to ensure vices associated with crypto are put in check – without thinking of banning it.

Nigeria should quickly learn from China and not tread the route of delisting the Naira in P2P trading. The naira should take its place in crypto trading. The government should keenly look at the race between nations to become in charge in crypto and effect it. It should make good laws and policies that will address the vices associated with crypto trading, as has been done by China, US, UK, EU nations and other Western economies.

In a when many nations are adopting digital currencies and transactions, and positioning their currencies in the market, Nigeria should not be doing the opposite – delisting the Naira from P2P trading. Instead, this is the best time to solidify Naira’s presence in the marketplace and employ financial policies that will help grow Nigeria’s revenue.

The United States of America holds the highest volume of Bitcoin, about 200,000 Bitcoin, with notable seizures. Of this, about 94,636 Bitcoin held by the US is seizure from Bitfinex hack; while about 51,351 Bitcoin is from the Silk Road dark web market, according to Meta AI. It also has USDT to its advantage.

The US has a good understanding of the crypto market. Instead of banning it, the US has put up regulations that help it nail the vices associated with crypto. The US cannot ban Crypto. The US cannot ban USDT. Nigeria should not delist the Naira from P2P trading platforms. It should understand it, regulate it and harness the gains it stands to offer.

Let the crackdown stop now! We say no to delisting Naira from P2P crypto trading platforms. Nigerians will still trade P2P without Naira and find a way of converting it to Naira. The best is listing the Naira and not delisting the Naira. Get the platforms to list Naira using NAFEM/CBN daily exchange rates just like the customs do daily.

With this approach, the government would be in total control of the market and the rates. Delisting the Naira from all P2P trading platforms means handing over the market to speculators who are to exploit other readily available loopholes to ruin the Naira. It is more difficult to track the P2P transactions on Telegram or WhatsApp platforms. Get the crypto platforms to list it with government-approved rates and also, pay their taxes.