Last Updated on February 12, 2021 by Ope Quadri
The latest restrictions on the trading of cryptocurrency in Nigeria isn’t over and should never allow that to discourage you from making some monies from buying and selling cryptos.
As we write, crypto enthusiasts in Nigeria can no longer fund their crypto wallet through their bank account.
Continuous use of an account to fund cryptocurrency-related activities may lead to a ban on your bank account.
So, what’s the way out of the CBN’s restrictions?
We’ve compiled here the list of 14 cryptocurrencies peer-to-peer (P2P) platforms you can use for buying and selling of bitcoin (BTC), ethereum (ETH), litecoin (LTC), Ripple (XRP) and other forms of cryptos.
Why P2P platforms is a stop-gap for CBN restrictions
The restrictions by the Central Bank of Nigeria (CBN) is definitely a setback which is going to greatly impact fiat on- and off-ramps, P2P trading platforms is the solutions to the restrictions at the moment.
The peer-to-peer platforms have been in existence before CBN’s sledgehammer on cryptos and remain unaffected.
Here is the list of 13 peer-to-peer exchanges right now available for Nigeria’s crypto market.
2 Methods of Cryptocurrency Trading
- Clearing House model
- Peer-To-Peer model (p2p)
Clearing House model
This is a regular cryptocurrency exchange platforms where a crypto firm buy and sell crypto-related assets to their customers.
The exchange is dealing directly with the exchange. You can fund wallet through your bank account and also withdraw directly from your wallet to your bank account.
The clearinghouse model is designed to eliminate counterparty risk. Regulators have powers on the clearinghouse model.
The second model is P2P where buyers can deal directly with sellers. Buyer and seller interact directly with each other, and the exchange offers escrow services that lock the funds until both parties agree to the trade.
How P2P works in crypto exchange
Mr B places a sell to exchange his 300 XRP for fiat currency (US dollar) in a p2p exchange.
The exchange takes the XRP and locks it in its escrow account. Mr C (the prospective buyer) indicates interest to buy the amount of XRP listed.
Mr C sends USD to the account of Mr B (the seller), and informs the exchange that the money has arrived.
And the exchange releases the XRP to the buyer (Mr C).
Despite efforts made by the exchange, p2p remains risky. It is advisable to only trade with those users with a good score on the platform.
How does P2P escrow service work?
Step 1: Place an order to buy or cryptocurrency. The crypto will be held by temporarily until the operation is successfully completed.
Step 2: Start a conversation with the seller or buyer.
When you are trading with someone that you do not know, it’s advisable to use the chat tool so that the chat history can be used if there is a dispute
Step 3: Make the payment if you are the buyer
Step 4: Notify the seller that you’ve completed the payment.
Step 5: Click the “Confirm” button to notify the seller that you made the payment.
If you are a seller, wait for the buyer’s payment confirmation before releasing the crypto.
Step 6: When everything goes smoothly, the buyer pays and the seller releases the crypto.
File an appeal if the buyer refused to release the crypto after you made payment
In this case, click on the “appeal” button and allows the escrow service to come into play.
Top 14 Peer-to-Peer(P2P) Cryptocurrency Exchanges
Ready to trade on this model, here are the best 13 p2p exchanges you can use right now:
- BuyCoins Africa
- Binance P2P
- Hodl Hodl
From Great Britain is Hodl Hodl a market-place available only for bitcoin (BTC). One of the things that make it unique is the fact that it doesn’t require any KYC to participate and the platform works globally in any region of the world.
This means Nigerian crypto traders can use Hodl Hodl to buy and sell their digital asset.
On Binance P2P, you can buy and sell digital assets like bitcon, ethereum, bitcoincash, ripple, litecoin, and Dogecoin with the best local bitcoin exchange.
Binance p2p is becoming one of the most popular among Nigerians after the CBN cryptocurrency restrictions.
Just like its p2p counterparts around the world, binance peer-to-peer exchange uses an escrow service. The asset is held by a trusted third to ensure safety and fair trading.
Once the buyer places an order, the seller’s cryptocurrency will automatically be transferred from the seller’s wallet to the temporary deposit with Binance P2P’s escrow service.
The cryptocurrencies will be held in the deposit guarantee until the transaction is successfully completed and confirmed by both parties.
Remitano is a p2p exchange that operates in over 50 countries. On this platform, you buy and sell Bitcoin, Bitcoin Cash, Ether, Litecoin, Ripple, USDT, and 10 other crypto assets.
You can find more on localbitcoins, paxful in one of our articles detailing how they operate.
Based in Hong Kong, LocalCoinSwap is another p2p exchange that is known for its diverse marketplace.
On LocalCoinSwap, you can buy and sell more than 10 cryptocurrencies like Bitcoin, Ethereum, USDC, BitcoinCash, Litecoin and others.
Any completed transaction attracts 1% fee. It is most popular p2p exchange among Asian crypto traders.
Key take away:
Exercise caution when using peer to peer exchange
Promptly file an appeal when the seller failed to release the fund for the platform to launch its escrow service to hold the fund
CBN has not banned cryptocurrency trading, its powers is bounding on banking sectors.