Nigerian analysts refute claims of crypto role in Bureau De Change shutdown
Local reports state that Bureau De Change operators announced the shutdown of operations in Abuja due to the unavailability of U.S. dollars.
The Nigerian cryptocurrency peer-to-peer (P2P) market is not accountable for the shutdown of the Bureau De Change (BDC) in the country’s capital, Abuja, according to Nigerian Web3 legal representative and analyst Kue Barinor Paul.
According to local media, BDC operators have announced the shutdown of operations in Abuja due to the unavailability of United States dollars. The currency traders reportedly mentioned the existence of P2P crypto exchange as a reason for its woes.
In an interview with Cointelegraph, Paul clarified that the allegations are baseless, emphasizing that cryptocurrency plays a minor role in Nigeria’s forex activities. He pointed out that more significant factors, such as price fluctuations and the country’s reliance on imports, contribute to forex shortages.
Paul explained that BDCs deal in physical fiat, whereas crypto transactions are carried out online with digital assets like stablecoins; hence, there’s no direct competition between the BDCs and the crypto space. He said blaming the crypto P2P market for the illiquidity problem of BDC dealers is a distraction from facing the real issues causing the problem.
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Nigeria is currently the biggest P2P market in the world, which came about after the Central Bank of Nigeria banned institutions from buying and selling crypto in 2021. However, a circular sent to banks in December 2023 lifted the crypto ban on Nigerian banks facilitating cryptocurrency transactions.
Many Nigerians dealing with foreign exchange struggle to conduct numerous transactions through traditional banking. Paul noted that current fees for transferring foreign currency are significantly higher within the banking system than in the crypto market, making P2P transfers more attractive.
Supporting Paul’s statement, Nigerian crypto analyst Rume Ophi said the crypto space promotes transaction inclusion, making it convenient for people to access foreign exchange and hedge their Nigerian naira against inflation.
Paul also highlighted collaboration opportunities between traditional players like BDCs and digital currency operators. However, for that to happen, Paul emphasized that the government has to regulate both sectors and see how BDCs can use technology to enhance their transactions.
Cryptocurrency needs to be regulated appropriately, and the government needs to understand the players in crypto and know how they operate to regulate it efficiently, Ophi added.
