And something huge has been happened in the world of money in Africa over the past couple of years. Cryptocurrency is increasingly being used by people. It is not only about consuming and producing by ordinary sales. Specifically, one has become very big; Peer-to-Peer (P2P) trading. In other words, P2P is when you trade crypto with someone without involving a bank, or even middleman. This kind of trade is transforming the movements and money usage among Africans.
Among the key factors that show the evolution of P2P trading in Africa is due to restrictions by banks. Take an example of players in Nigeria who at one time as instructed by their banks were not allowed to make crypto transactions. Lots of individuals who exchanged Bitcoin, USDT, and other coins were not able to send or accept money through the bank to complete a crypto deal. And that is when P2P turned to the solution. Buyers and sellers can now connect directly and trade safely using escrow systems on sites such as Binance, Paxful or Remitano, as opposed to sending money to an exchange.
P2P trading is an easy process. Assume I would like to purchase Bitcoin. I open a P2P platform and here I find suppliers who are willing to sell. I pick one, and through the naira; I type it directly into their bank account and as soon as they indicate that they got it, the platform transfers the Bitcoin to my wallet. The same applies on a sale, I have sent the crypto to the platforms escrow, then I receive payment in naira which I acknowledge and the crypto can be released back to the person. This protects both the sides against fraud.
Inflation and devaluation of the currency is one of the main reasons that P2P impelled its growth in Africa. The local currency continues to weaken in most African nations. The currency naira in Nigeria has been falling rapidly against the dollar. Individuals do not want their money to continue experiencing value depreciation and therefore, they are keen to convert them into USDT and other stablecoins or cryptocurrencies such as Bitcoin. Using P2P trading, they can do it without referring to official banks or foreign exchange offices.
Remittance and cross-border payments is the other reason. A number of Africans have relatives in foreign countries or engage in business with other nations. Working through the usual bank system is both costly and time consuming. However, under P2P crypto trading, USDT can be sent to Kenya in a matter of minutes by a person in Ghana. This can then be sold on a P2P market to buy their local currency. It is extremely appealing in terms of this speed and cost.
P2P too has grown rapidly as a result of technology. Access to the Internet and a smartphone are nearly universal now. Binance P2P, Paxful and LocalBitcoins provide their apps which operate user-friendly mobile applications. Even the individuals that are not so good with the use of technology can learn how to use P2P through several trials. The use of social media has also assisted in the process, where most Telegram and WhatsApp groups directly connect buyers and sellers.
The first observation that I have made as a Nigerian is that P2P is empowering youth with money. In the past, most of the young Africans had to rely on the formal employment to generate income. Now there are P2P traders who are full-time P2P traders. They also sell and purchase everyday making profit between the exchange rates. This has brought with it a new income generating source to thousands of individuals.
But, P2P is not risk free. Some will be frauds and will attempt to scam novice traders. Others will give false alerts that they are sending money. The others attempt to state that they have not been paid despite release of the crypto. That is why it is worth trading only on those platforms that make use of escrow services and never beyond. Novices should also start small until when they have mastered the process.
Price fluctuation is the other challenge. The price of crypto is quite swift. With a price agreed upon there exists the possibility of trying to escape through the market moving especially with one party. This is the reason why swiftness and proper communication are a consideration in P2P trading.
Nonetheless, the advantages are driving the P2P trading in Africa to new heights. It is empowering people with their money independent of banking. It is assisting people to battle inflation in saving worth in stablecoins. It is supporting the easy and low-cost money remittance between nations. And it is developing new avenues of generating income in a continent where the levels of unemployment are high.
Governments are gradually warming up. Others are putting in place ideas of how to control the P2P trading, as opposed to outright prohibition. Others are creating their currencies also on what can be called crypto. Nigeria also launched its eNaira that has yet to achieve the popularity of Bitcoin and USDT in P2P markets.
I think in Africa P2P trading will continue to expand. Need to have cheap, fast and borderless money is too high to halt. P2P will continue to make Africans financially strong as long as there are ways that people can communicate using internet and gaining some level of trust with each other using the escrow systems.
Conclusively, the emergence of P2P crypto trading in Africa is not all about technology but freedom, control and opportunity. It was simply an alternative to circumvent controls but it has grown to become a primary aspect in trading and saving our money and moving our money around. When it is carried out prudently and securely, it has the potential to become a potent instrument in assembling monetary stability in the future of Africa.
0.000 SRY