Is cryptocurrency legal in Nigeria?
The increasing popularity of cryptocurrencies has not gone unnoticed by Nigerian officials, who have taken note of the trend. The Central Bank of Nigeria (CBN) issued a ban on cryptocurrency exchange operations in February of this year, barring banks and financial operators from processing transactions for cryptocurrency exchanges. Customers who buy, sell, or trade cryptocurrencies in Nigerian banks would be obliged to close their accounts, according to the law.
Despite this setback, residents of Nigeria are still able to purchase, sell, and exchange Bitcoin and other cryptocurrencies. Among the material provided in this guide will be an overview of the platforms where it is still possible to purchase cryptocurrency in Nigeria, as well as information on the payment methods that can be used to make such purchases.
Payment Options for Purchasing Cryptocurrency in Nigeria
Using a credit card, you can purchase Bitcoin and other cryptocurrencies.
Because it is quite handy, purchasing bitcoins using a credit card continues to be popular. However, because of the CBN’s crypto ban, Nigerians are now unable to purchase Bitcoin (BTC) and other cryptocurrencies with naira-denominated credit or debit cards. Payments made with international Visa or Mastercard credit cards are accepted. Consider the fact that credit card processing costs may result in paying with a credit card being less cost-effective than using other payment methods in some cases.
Using a debit card, you can purchase Bitcoin and other cryptocurrencies.
The Central Bank of Nigeria’s crypto prohibition extends to debit cards linked to Nigerian bank accounts, in a manner similar to that of credit cards. International debit cards, on the other hand, would continue to function and would incur lower fees as compared to credit cards. It should come as no surprise that purchasing Bitcoin using credit and debit cards is not the most convenient method of doing so in light of the restriction. The fact that Nigeria is one of the top countries in the world in terms of peer-to-peer (P2P) trade volume, as well as the top African country for Bitcoin P2P trading, is also a contributing factor.
Using peer-to-peer (P2P) trading, you can purchase Bitcoin and other cryptocurrencies.
Many Nigerians have resorted to purchasing cryptocurrencies using bank transfers in order to get around the country’s current regulatory framework. Paying using a bank transfer is possible for cryptocurrency merchants through peer-to-peer (P2P) exchanges. In addition, because it is a direct transaction, this approach is one of the most affordable methods of purchasing cryptocurrency. In Nigeria, two sites, Binance and Bundle, make it possible for people to trade Bitcoins or purchase cryptocurrencies using this method of payment. LocalBitcoins and Paxful are two other Bitcoin marketplaces that are accessible to Nigerians, in addition to Coinbase.
Using Naira, you may purchase Bitcoin and other cryptocurrencies.
If you wish to buy cryptocurrency using naira or other fiat currencies in cash, you have a number of choices, which include the following:
Using a website such as LocalBitcoins to locate a local dealer who will accept a cash payment instead of a credit card
Locating and using a Bitcoin ATM to make a straight purchase. Be aware that Bitcoin ATM fees are substantially greater than those charged by traditional payment methods, such as credit cards.
Nigerian consumers may check the current exchange rate of Bitcoin to Naira by visiting the Bitcoin page on CoinMarketCap and changing the currency on the top right to NGN (Nigerian Naira).
Buying Bitcoin and Other Cryptocurrencies in Nigeria: A Step-by-Step Guide
If you want to acquire cryptocurrencies in Nigeria, you should generally follow these three steps, regardless of whatever platform or service you choose.
1. Select a Cryptocurrency Wallet:
You must have access to a cryptocurrency wallet in order to store the cryptocurrency that you have purchased. If you don’t want to utilize an exchange-provided wallet, you can use a wallet for which you only have access to the private key, which is more secure. Hardware wallets, such as the Ledger Nano S, desktop software wallets, such as Electrum, and mobile applications, such as Trust Wallet, are all examples of this latter alternative.
2. Determine where you will purchase your cryptocurrency.
There are a plethora of various cryptocurrency platforms from which to pick. Generally speaking, they can be split into three categories:
Cryptocurrency brokers: Cryptocurrency brokers provide customers with simple payment methods, such as the ability to purchase cryptocurrency using fiat money. Financial institutions such as banks and debit card companies typically have fiat on-ramps that combine simple payment methods such as bank transfers and debit card payments. Among the cryptocurrency brokers who accept direct naira payments is Luno, which is a Nigerian company.
Cryptocurrency trading platforms: These are online platforms that allow users to trade Bitcoin and other cryptocurrencies with one another. Exchanges provide traders with the convenience of depositing fiat dollars into online wallets, which they can then use to purchase the crypto assets of their choice. Here is a list of the greatest platforms available to Nigerians, as well as a brief description of each. It should be noted that several countries have implemented limitations on Nigerian nationals as a result of the CNB embargo.
Peer-to-peer exchanges (P2P): P2P exchanges allow individuals to directly negotiate with one another. It matches buyers with vendors who identify their price and payment options that are acceptable to them. Once a transaction has been initiated, the money are held in an escrow system until the seller has confirmed receipt of the monies in his hands. This strategy provides a higher level of privacy. The platforms LocalBitcoins and Binance, which allow Nigerians to engage in peer-to-peer trading, are examples of such services.
3. Make a Cryptocurrency purchase.
The final step is to make a purchase of the cryptocurrency of your choice. For newcomers, it is recommended that they purchase through a broker or exchange that accepts naira payments.
In order to use the majority of centralized systems, you will need to first register an account. You may also be required to supply data and personal information as part of a Know Your Customer (KYC) process, depending on the platform and the jurisdiction in which it is registered.
It is necessary to authenticate your identity through the use of a legitimate identification document as part of the KYC process. Most platforms will not enable you to make a purchase until you have completed this step. As soon as your account has been authenticated, you’ll be able to select which cryptocurrency you’d like to acquire and how much you’d like to spend, as well as which payment method you’d like to employ. Before confirming the purchase, make sure to verify the whole cost of the transaction, which includes all fees and taxes.
Instructions on How to Purchase Bitcoin in Nigeria
The stratospheric rise in the price of bitcoin in 2020 and 2021 has sparked a large demand for cryptocurrency in Nigeria. This page contains a comprehensive listing of all of the exchanges available in Nigeria. Meanwhile, the following are some exchange and other options:
In order to create a safe environment for buyers and sellers to interact in, Binance has established a peer-to-peer (P2P) network that charges no transaction fees to buyers and sellers. Nigerians can also take use of a wide range of cryptocurrency solutions, including decentralized financing (DeFi).
ATMs that accept bitcoin: Despite the fact that there are just a few Bitcoin ATMs in Nigeria, they continue to be a viable, though pricey, option for Nigerians looking to purchase Bitcoin (BTC) and other cryptocurrencies.
Where Can I Purchase Ether in Nigeria?
Ether (ETH) is the second-largest cryptocurrency by market capitalization and one of the most widely used alternative currencies in the world. Ether is in high demand in Nigeria as a result of its recent appreciation in value and its essential role in the production of several DeFi products. Nigerians can use peer-to-peer (P2P) services to trade ether in order to adapt to the constraints imposed by the Central Bank of Nigeria’s prohibition on the cryptocurrency.
Is it a good idea to buy cryptocurrency in Nigeria?
With a population that is both youthful and technologically sophisticated, it is no surprise that Nigeria is one of the countries that is leading the way in cryptocurrency adoption. With El Salvador being the first country to recognize Bitcoin as legal cash, it is possible that more countries could follow suit in the near future.
To understand more about cryptocurrencies in Nigeria, read our guides on the top cryptocurrency exchanges in Nigeria, best cryptocurrency apps for Android and iOS devices in Nigeria, and the cryptocurrency renaissance in Nigeria.