Paxful, a cryptocurrency trading platform, has reported a surge in weekly transactions by Nigerians on its Lightning Network.
This is despite the Central Bank of Nigeria’s restrictions on cryptocurrency transactions in the country and the crashing prices of cryptocurrencies globally.
According to the trading platform, the volume of money sent by Nigerians via the network doubled from October 2021 to May 2022.
The statement from Paxful read in part, “Paxful, the leading global peer-to-peer (P2P) fintech platform announced that weekly transactions on the Lightning Network have increased tremendously.”
It added, “In Nigeria, the volume of money being sent out on Lightning has doubled from October 2021 to May 2022.”
Paxful further disclosed that globally, deposit volume increased five times since the platform launched its integration on the Lightning Network in September 2021.
Paxful noted that the deposit volume increased by 54 per cent in April.
The CEO, and founder of Paxful, Ray Youssef, noted that Nigeria was one of the countries with the highest Bitcoin trade volume in the first week of May this year.
He said, “In the first week of May, Nigeria was one of the countries with the highest Bitcoin trade volume on Paxful alongside the United States, Ghana, China, and Kenya. Today, we have over 70 countries using Lightning on Paxful.”
Between 2015 and 2020, Nigerians have traded $566m worth of Bitcoin across various cryptocurrency trading platforms, making the country the second largest peer-to-peer Bitcoin market after the United States, according to news.bitcoin.com.
Nigerians traded at least N77.75bn ($185m) worth of Bitcoin in the first three months of this year, according to Paxful, which is a 5.71 per cent increase from the N73.54bn worth of Bitcoin that was traded in the corresponding period of 2021.
According to the firm, Nigeria was its largest trading country in 2021 with 16,000 daily trades. The market cap of BTC dropped by $36.90bn from $902.10bn as of January 1, 2022, to $865.20bn as of March 31, 2022.
This was despite the CBN’s restrictions on cryptocurrencies in the nation. In February of 2021, the CBN asked banks in the nation to stop transacting in and with entities dealing in crypto assets.
The bank said, “Further to earlier regulatory directives on the subject, the bank hereby wishes to remind regulated institutions that dealing in cryptocurrencies or facilitating payments for cryptocurrency exchanges is prohibited.”
However, the President of Stakeholders in Blockchain Technology Association of Nigeria and General Secretary of Blockchain Industry Coordinating Committee of Nigeria, Senator Ihenyen, urged the CBN to rethink its stance on crypto.
Since the restriction, P2P trading of crypto, especially BTC, has increased. According to a 2021 report by Chainalysis, the nation is the sixth leading nation in the world in terms of crypto adoption.
A recent report by KuCoin, a crypto exchange with over 10 million registered users, disclosed that about 33.4 million Nigerians traded or owned crypto assets.