Crypto Ban: Expert Urges Better Framework as Nigerians Turn to Peer-to-Peer Trading

By Tosin Clegg

When the Central Bank of Nigeria (CBN) issued its February 5, 2021 circular prohibiting banks and other financial institutions from dealing in cryptocurrencies, the decision sent ripples through the country’s fintech sector. In a nation that had become one of the world’s fastest-growing markets for digital assets, the reaction was swift and divided.
The order forced banks to shut down accounts linked to crypto trading platforms and individuals transacting in digital currencies. But instead of slowing adoption, it pushed trading into new territory. Within days, thousands of Nigerians shifted to peer-to-peer (P2P) channels, conducting transactions directly with one another and bypassing the more formal systems.
According to Kehinde Takuro of AELEX, who also serves as Project Lead of its FinTech Centre, she opines that the move to peer-to-peer trading was predictable. “When you cut off access to regulated exchanges, people will naturally find an alternative,” she said in an interview with BusinessDay. “It is still to be determined whether this CBN policy will actually reduce the risk the CBN is worried about, with this increase in peer-to-peer crypto trading.” Takuro acknowledged those concerns about the risks of cryptocurrency but argued that the policy response should have been more measured. “The risks are real,” she noted, “but a blanket restriction could ignore the benefits embedded in this technology. The CBN, Securities and Exchange Commission, and National Information Technology Development Agency should be working together on this,” she said. “Crypto is likely not going away anytime soon. The challenge is to build frameworks that make it safer.”
Her recommendations included clearer know-your-customer procedures for exchanges, local account monitoring under AML and CFT guidelines, and cooperation between regulators and the tech community to track cross-border transactions. “You can’t regulate in isolation,” she explained. “If users are forced to rely entirely on offshore P2P platforms, it becomes impossible to protect them.”
By mid-year, data from international analytics firms would show Nigeria with increasing global P2P crypto trading numbers, surpassing even larger economies. To Takuro, that surge underscored that cutting off banking access only deepens informality. “Peer-to-peer trading isn’t new,” she said. “But when it becomes the only option, people can be left without legal recourse if things go wrong. The irony is that regulation could have mitigated those risks.”
She believes Nigeria still has the chance to turn around stifling policies. “This moment should push us to build a harmonized framework,” she concluded. “If we get it right, Nigeria can become a continental leader in blockchain regulation, not because we were the first to ban it, but hopefully because we took a futuristic approach by implementing policies that can encourage innovation and enforcing necessary protective measures.”