Binance Experience Growth in P2P Users in Africa

The world’s biggest cryptocurrency trading platform Binance announced that their experience growth from P2P trading from users in Africa. This is has been attributed to the decision by regulators in Nigeria and other African countries that may have spurred the rise in peer-to-peer transactions in the cryptocurrency market.

A survey conducted by the Binance team has shown adding that there are three reasons users invest in crypto. The research amongst African users fifty-five (55) per cent said they own crypto as part of a long-term investment strategy, 38 per cent doesn’t trust the current financial system, and 31 per cent see crypto as a short-term trading opportunity. Based on this research, Binance said it had seen an over 2000 per cent increase in the number of peer-to-peer (P2P) users in Africa from January to April 2021. in addition, it is expected to continue to rise as regulators in these African countries don’t look like to reverse their decision, especially in Nigeria, over the apex bank directives to ban Fintech companies from processing crypto payment in Nigeria.

However, the Nigerian crypto market recently suffered a setback due to a decision by the financial regulator to prohibit banking services from providing support for cryptocurrency businesses. Although following that decision, the crypto market has seen a spike as users migrated from crypto-to-fiat exchanges to peer-to-peer exchanges. According to a report by Luno and Arcane, Research found that Nigeria contributes the most volume of P2P in sub-Saharan Africa with as much as $8 million weekly transactions.

While according to the Binance report, the volume of P2P transactions in Africa surged by 386.93 per cent in just four months. Adding that its P2P user base in Africa, grew by, 2228.21 per cent within, the same period. In essence, peer-to-peer refers to the process of buying and selling cryptocurrencies directly between users, without a third party or intermediary. When users buy or sell cryptocurrencies using a traditional exchange, they don’t transact directly with the counterparty. Instead, they use charts and other market aggregators to determine the optimal time to buy, sell, or hold cryptocurrencies. The exchanges organize the transaction on their behalf, and the market price determines the final price at the time of the transaction.

Meanwhile, the Nigeria Securities and Exchange Commission (SEC) and the Central Bank of Nigeria (CBN) have collaborated to understand better and regulate the cryptocurrencies market. This is coming after the February 5 circular issued by the apex bank directing a financial institution to close account of person or entities involved in cryptocurrency transaction-bitcoin within their system. In addition, according to Google Trends, Nigeria also dominated search traffic for “Bitcoin” on Google in 2020.

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